[ANN] Ethereum: Welcome to the Beginning

[superresistant]

The day this coin launch, the scam crew will probably be arrested like Ross Ulbricht from SilkRoad.

This could be the biggest scam ever in crypto-currency. If you support it, you can get into trouble.

I wouldn't take that risk.

[1714148831]

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[_ingsoc]

Alright. At this point I think it's pretty unreasonable to expect them to go through 32 pages and extract all the information people are unhappy about in order to get a response. So why don't we compile a list in bullet form to summarise things people need information about. I'll add a few points that seem to pop up (no matter how crazy anyone thinks they are). If you want to post bullet points to get information about, please do so and I'll add them to this list.

LIST OF COMMUNITY QUESTIONS AND ANSWERS (ADD TO IT)*

• (Q) Can you explain your reasoning behind the 0.50*X premine and its division in the organisation in conjunction with the reasoning behind raising Bitcoin for expenses? Some people seem to view this as "double dipping", so information on the reasoning behind these decisions would be really helpful (this might be in the prospectus to some extent).
  
  
  • Pending Answer (or help me find a quote)

• (Q) Charles mentioned someone or some people that either have a present or past relationship with Goldman Sachs are involved or expressed an interest in the project. Can you elaborate on this relationship? Some people are upset by this.
  
  
  • (A) from charleshoskinson:
    

    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.

    
    

    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.
    

• (Q)

  Why an IPO(under such extreme conditions), why such complex inflation model?

  
  
  • Pending Answer (or help me find a quote)

• (Q) There are 22 people listed in the post by Vitalik Buterin introducing the project. Who are the community liaisons for Bitcointalk or representatives that can help answer some of these community concerns and questions? These boys are girls can get a bit rabid from time to time, and it becomes really difficult for newcomers to get accurate information without knowing whose posts to look for.
  
  
  • Pending Answer (or help me find a quote)

• (Q) This question comes from giladio_0 on Reddit. Why was the choice made to crowdfund this whooping amount outside of the due registration and regulatory processes such as the SEC or Canadian equivalent? What is the purpose of this? It will only instigate trouble with the regulators and jeopardize all of the investor's money, and the stability of the project.
  
  
  • Pending Answer (or help me find a quote)

• (Q)

  Ask them to make the case for why we need Proof of Work and the inflationary model of crypto-equity distribution? If Proof of Work is necessary for securing the blockchain, why aren't they going with a deflationary model which requires Ethers to be destroyed when spent to offset the justified inflation if it must be mined by Proof of Work?
  

  
  
  • Pending Answer (or help me find a quote)

Again, please add to this list in bullet form in your posts if you care to, so that we can present these community concerns and questions and get the answers you're after. Obviously everyone posting is interested in the project, so please make your voice heard in a constructive way, for you to be able to make up your mind about supporting the project.

QUESTION FORMAT (SO WE CAN SPOT IT)

Make a post in the form of: (#) Your Question. I'll try and group them if possible.

* NOTE: All these concerns, issues, and questions are reproduced verbatim.

[Std52stp]

This will be a revolution.

not sure. I am not gonna invest my hard earned money into this.
I am not gonna feed these hungry coyots.
there are so many ways how to throw away your money - flush it down the toilet, throw it from window, burn it, give to homeless..... or buy some ether or US debt notes

[Std52stp]

The day this coin launch, the scam crew will probably be arrested like Ross Ulbricht from SilkRoad.

This could be the biggest scam ever in crypto-currency. If you support it, you can get into trouble.

I wouldn't take that risk.

They might be arrested like Charlie Shrem 
 http://www.coindesk.com/bitinstant-ceo-charlie-shrem-arrested-silk-road-bitcoin-bust/

[pandaisftw]

I need some clarification please. 

Lets say someone invests 10 BTC ...

Why does everyone say they won't get much ROI?  I realize its going to gradually decrease in value, but this seems bewildering to me. 

Nobody is going to invest in something declared ahead of time to decrease in value.  So there's information missing from this response as well.

Someone said you *might* double your money after a few years.  Is that really the likely outcome?  I probably would save my $10,000 in BTC for something else if I have to wait 3-5 years for it to go to a whopping $20,000.  I would appreciate a response to this from someone who actually understands the system.  That eliminates 90% of people in this thread.

-B-

1 year out:

Founders immediately sell 1/3 of their holdings (50% premine)
Also, miners will mine 40% of intial supply at the end of the year.

Where does this leave us?

1/(1+(.5/3)+.4) = 0.638 or 63.8% of your initial buy-in. From the get-go, you already lost money on your investment, and now you have to fight just to make ROI... So the market cap would have to triple for you to double your investment, and that's only the first year. Every year your holdings will be heavily diluted, until the year 2070 or something. Compared to other coins, you could have made 300%+ (due to not having this crazy premine and inflation) in the first year.

Good idea, but not a tempting investment to make.

[KoinMaster]

LIST OF COMMUNITY QUESTIONS (ADD TO IT)

• Can you explain your reasoning behind the 0.50*X premine and its division in the organisation in conjunction with the reasoning behind raising Bitcoin for expenses? Some people seem to view this as "double dipping", so information on the reasoning behind these decisions would be really helpful (this might be in the prospectus to some extent).
• Charles mentioned someone or some people that either have a present or past relationship with Goldman Sachs are involved or expressed an interest in the project. Can you elaborate on this relationship? Some people are upset by this.

• Why an IPO(under such extreme conditions), why such complex inflation model?

[/list]

[gutshot5820]

The day this coin launch, the scam crew will probably be arrested like Ross Ulbricht from SilkRoad.

This could be the biggest scam ever in crypto-currency. If you support it, you can get into trouble.

I wouldn't take that risk.

They might be arrested like Charlie Shrem 
 http://www.coindesk.com/bitinstant-ceo-charlie-shrem-arrested-silk-road-bitcoin-bust/

Yup these guys are laundering money through the exchange of coins to enter a gray area to avoid crowdfundraising regulations.  Everyone better believe that the feds SEC and Canadians are watching this.  Some of the pre-sales have been small fish but this amount of money will not be overlooked.  Once you send your bitcoins, if they get arrested, everyone will lose. 

[_ingsoc]

Why an IPO(under such extreme conditions), why such complex inflation model?

Cool. Added it to the list. Just use a singe bullet point "(#) Your Question" so I can keep track of it all. I'll add a formatting suggestion.

[nesco1805]

Founders immediately sell 1/3 of their holdings (50% premine)
Also, miners will mine 40% of intial supply at the end of the year.

Where does this leave us?

1/(1+(.5/3)+.4) = 0.638 or 63.8% of your initial buy-in. From the get-go, you already lost money on your investment, and now you have to fight just to make ROI... So the market cap would have to triple for you to double your investment, and that's only the first year.

It's even worse than that. Look:

TS(t) = 1.5*X + 0.4*X*t

For every $2 raised there is inflation value of:
$1 of premine
$0.8 of 1yr mine

TS(1) = 1.5 * $2 + 0.4 * $2 = $3.8

2/3.8 = 0.526


Aaaand.... it's gone. Almost 50% of your investment.

[_ingsoc]

It's even worse than that. Look:

TS(t) = 1.5*X + 0.4*X*t

For every $2 raised there is inflation value of:
$1 of premine
$0.8 of 1yr mine

TS(1) = 1.5 * $2 + 0.4 * $2 = $3.8

2/3.8 = 0.526


Aaaand.... it's gone. Almost 50% of your investment.

If this is a concern or question about inflation please help me word it into a question so we can get answers. Refer to this post.

[Luckybit]

I think eth developers have been brainwashed by goldman sachs in believing they are going to change the world

I feel bad for Charles. Guy mentions that someone who worked for Goldman Sachs in the past has interest in the project and a new Internet conspiracy theory is born. If Goldman Sachs is secretly engineering a plot to troll everyone on the Internet, they'd be smart enough to not get Charles to announce it in a YouTube video. Besides, if you knew how deeply embedded those corporations are in Bitcoin, you'd burn your hard drive to a crisp in a bonfire. Keep on derpin'!

I wouldn't care where people worked before hand. It's the fact that Ethereum seems to be designed to screw investors. It almost seems like it's designed wrong on purpose.

I'm willing to say it's possible that it's just a philosophical disagreement. A lot of very smart people can disagree on these matters. I'm willing to watch how Ethereum does but I'm not going to be investing in an IPO where it's 1000 Ethers a Bitcoin. That is so over priced that it's almost ridiculous. 50% premine is even more ridiculous.

Say what you want about the IPO but as an investor it's just too much risk. On top of that the design is extremely ambitious but also presents security risks as well being that it is turing complete. Using virtual machines and sandboxes may help but it's also going to make it much more expensive and difficult to develop than most people here realize.

I like the technology, so from that perspective I think its pretty cool. But from the perspective of an investor I think it's not worth the risk to me when you have Bitshares, Mastercoin and others which aren't going to inflate for eternity (for no apparent reason).

If you're going to dilute our shares don't ask for 50% premine. Don't design it in such a way so that it is as unattractive to early investors as possible. We aren't stupid.

[_ingsoc]

I wouldn't care where people worked before hand. It's the fact that Ethereum seems to be designed to screw investors. It almost seems like it's designed wrong on purpose.

I'm willing to say it's possible that it's just a philosophical disagreement. A lot of very smart people can disagree on these matters. I'm willing to watch how Ethereum does but I'm not going to be investing in an IPO where it's 1000 Ethers a Bitcoin. That is so over priced that it's almost ridiculous. 50% premine is even more ridiculous.

Say what you want about the IPO but as an investor it's just too much risk. On top of that the design is extremely ambitious but also presents security risks as well being that it is turing complete. Using virtual machines and sandboxes may help but it's also going to make it much more expensive and difficult to develop than people here realize.

I like the technology, so from that perspective I think its pretty cool. But from the perspective of an investor I think it's not worth the risk to me when you have Bitshares, Mastercoin and others which aren't going to inflate for eternity (for no apparent reason).

If you're going to dilute our shares don't ask for 50% premine. Don't design it in such a way so that it is as unattractive to early investors as possible. We aren't stupid.

Help me add words to the questions if I'm missing things. I'm trying to get through the noise and summarise community concerns. Ethereum has the potential to be a great project, but who would want to bring a project to this community if the response is totally out of control. If their responses suck and the community feels they can go to hell, then that's cool if we got organised and had proper discourse.

You also know I'm working with tacotime on MC2, so I'm trying to learn so I don't have to cry myself to sleep when there's more community engagement with that project.

[_ingsoc]

I've added a question to the list:

(#) There are 22 people listed in the post by Vitalik Buterin introducing the project. Who are the community liaisons for Bitcointalk or representatives that can help answer some of these community concerns and questions? These boys are girls can get a bit rabid from time to time, and it becomes really difficult for newcomers to get accurate information without knowing whose posts to look for.

[Tompa]

Since I heard about Ethereum I've been reading about it and from beginning I was determined to invest 1 btc in the "IPO".
But because of very sound warnings from many people here I lowered my investment first to 0.5 btc and now to 0 btc at "IPO".

Although I would like to stress that 30000 BTC is NOT WHAT THEY ASK! but I still think that the premine and other factors that will go against investors are too much. It is not fair to unload ALL the risk to investors. I would like to run my business like that.

------------
Here is THE PLAN:

I would like to start a new, phenomenal flower business (that I've already have much experience in) and I would like to get your money to lift it up from the ground. I have great new Ideas, and plans and I can work on some very complex scheme (MLM, fiduciary guys etc) to smoke your eyes. But in fact I will have no risk, and your "shares" in my company will be greatly diluted (destroyed) because I will get new "partners" on the way (multi level selling of flowers, new partnerships etc.) and I will give them "shares" instead of money also. But I will give myself a half of my company that you funded as well. Later on I promise to turn my company into some digital autonomous company (that things don't even exist yet and who knows will they actually work).
Oh, and I will stop this "IPO" if I reach 50000 btc (I have to ask more than Ethereum guys because I really am already running flower business, have something to prove, adoption of flowers and the need for flowers is way more tangible then cryptos, and I'm on my mid thirties, and at age 19 I was winning at math competitions etc.....)

But I will settle with 700 BTC - that would be enough for me to start this....

Here is my bitcoin address and you can start pouring money: 15ZkyZnhn8Lfz66yHuiVU4cxT1wzb1kxa8
---------------------

How much money would I be able to collect this way in Real Life? That is why they cannot go to any VCs and present their idea. They would be escorted out with great laugh.

I will definitely practice my patience skills. :-)

Supposedly Vitalik said they actually need 500 btc. What happens if they get only 450 or less? Will they return the money?

It is really sad that no representative of Ethereum bothered to show up here in days, just few days before the so called IPO. Don't please tell me that guys who greedily plan on becoming VERY rich (before actually starting to work) don't have time to reply to any negative comments here or update their blog because they are in Miami on weekend? I run my business even when on vacation and I have significantly less staff than they've listed. Are they ALL in Miami, still, and someone took Internet away from them?

By each passing day this looks more and more like Visacoin.

The best part is they are trying to sell us ether - thin air and that in a very small quantities for a very high price + any value that this ETH will have it will be diluted. And all that if they can deliver at all.

I'm telling you if you would fund my business idea with the flowers with 50000 btc, it would be extremely difficult for me to stay hungry....

I know many people (my self included) are very sorry we missed the NXT boat when it was still being build (although it is still my best investment in cryptos to date). This is definitely not the one to rush into. I plan on keeping my eye on Ethereum because I believe it could have very promising technology but this "IPO" is too greedy, to punitive to investors and it doesn't follow up on any substantial evidence that those guys will deliver.

I don't even want to go into Goldman Sachs part....

[_ingsoc]

I don't even want to go into Goldman Sachs part....

There is some information from charleshoskinson about the Goldman Sachs issue. I reproduce this for visibility. If you think it's bs, point out what you want more information about or what doesn't stack up (if it's substantial I can add it to the list and we can get answers).

• (Q) Charles mentioned someone or some people that either have a present or past relationship with Goldman Sachs are involved or expressed an interest in the project. Can you elaborate on this relationship? Some people are upset by this.
  
  
  • (A) from charleshoskinson:
    

    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.

[Dps23]

Since I heard about Ethereum I've been reading about it and from beginning I was determined to invest 1 btc in the "IPO".
But because of very sound warnings from many people here I lowered my investment first to 0.5 btc and now to 0 btc at "IPO".

I think the same. Maybe I will invest during February but only some 0.05 BTC or smaller amount because I am still curious but sadly it seems that greedy already won over original best intentions.

[gutshot5820]

I think eth developers have been brainwashed by goldman sachs in believing they are going to change the world

I feel bad for Charles. Guy mentions that someone who worked for Goldman Sachs in the past has interest in the project and a new Internet conspiracy theory is born. If Goldman Sachs is secretly engineering a plot to troll everyone on the Internet, they'd be smart enough to not get Charles to announce it in a YouTube video. Besides, if you knew how deeply embedded those corporations are in Bitcoin, you'd burn your hard drive to a crisp in a bonfire. Keep on derpin'!

I wouldn't care where people worked before hand. It's the fact that Ethereum seems to be designed to screw investors. It almost seems like it's designed wrong on purpose.

I'm willing to say it's possible that it's just a philosophical disagreement. A lot of very smart people can disagree on these matters. I'm willing to watch how Ethereum does but I'm not going to be investing in an IPO where it's 1000 Ethers a Bitcoin. That is so over priced that it's almost ridiculous. 50% premine is even more ridiculous.

Say what you want about the IPO but as an investor it's just too much risk. On top of that the design is extremely ambitious but also presents security risks as well being that it is turing complete. Using virtual machines and sandboxes may help but it's also going to make it much more expensive and difficult to develop than most people here realize.

I like the technology, so from that perspective I think its pretty cool. But from the perspective of an investor I think it's not worth the risk to me when you have Bitshares, Mastercoin and others which aren't going to inflate for eternity (for no apparent reason).

If you're going to dilute our shares don't ask for 50% premine. Don't design it in such a way so that it is as unattractive to early investors as possible. We aren't stupid.

+1

I would like to add, what would happen if the bitcoin community gave them the 30,000 bitcoins they are asking for?  Wall Street and Goldman Sachs advisers would come out with a new team every week and would ask for a large pre-mine and pre-sale before launch of every new coin.  Ethereum would set a precedent and we would enter a new era dominated by wall street that would take all the profits out up front and put the entire risk on the bitcoin community.  If this pre-sale is a success, it would be the end for miners and crypto investors.  Right now we are able to take a risk on ground floor investments, but once/if this coin succeeds we will be forced to buy in and take more risk on every new coin.  This coin is NOT a ground floor investment, it is not even midterm, it is a long term investment that will be instantly diluted that shifts the early profits entirely to the coin devs and puts the risk entirely on the bitcoin community.  Everything will have to go perfectly for miners and investors to make any money.  And it will only be the beginning, because if they see this model works, then every new coin will tax the bitcoin community and put the risk on us.

[_ingsoc]

I would like to add, what would happen if the bitcoin community gave them the 30,000 bitcoins they are asking for?  Wall Street and Goldman Sachs advisers would come out with a new team every week and would ask for a large pre-mine and pre-sale before launch of every new coin.  Ethereum would set a precedent and we would enter a new era dominated by wall street that would take all the profits out up front and put the entire risk on the bitcoin community.  If this pre-sale is a success, it would be the end for miners and crypto investors.  Right now we are able to take a risk on ground floor investments, but once/if this coin succeeds we will be forced to buy in and take more risk on every new coin.  This coin is NOT a ground floor investment, it is not even midterm, it is a long term investment that will be instantly diluted that shifts the early profits entirely to the coin devs and puts the risk entirely on the bitcoin community.  Everything will have to go perfectly for miners and investors to make any money.  And it will only be the beginning, because if they see this model works, then every new coin will tax the bitcoin community and put the risk on us.

Given that so damn vocal on here, you want to put some of your speech into something they can actually respond to? Like something direct?

[klee]

_ingsoc is for Ethereum what TKeenan is for Mastercoin lol

[_ingsoc]

_ingsoc is for Ethereum what TKeenan is for Mastercoin lol

I don't know who TKeenan is. When I first heard about Ethereum, I thought it was interesting. I think it's one of the most promising projects we've seen in a long time (in concept). Most people can agree with that. I'm concerned about some of the issues raised on here too. Given that I plan on putting some of my own money into it, I want to try and figure out what's going on and make a decision. I know we're not going to figure that out by all getting on a box and screaming as loud as we can. I'm trying to help you, dammit!