concerns about ethereum's fundraiser

[coinrevo]

Ethereum has some support by several prominent bitcoin community members. I have several concerns about this "fundraising" process:

* amount: up to 36,000,000 USD equivalent. if an engineer gets 100,000$p.a., this is the equivalent of 360 man years. while its intended as a "hardcap" there is no way to verify. it is obvious that this amount has no relationship to expected near term cost.

* price: Fixed not by supply and demand, but by price fixing.

* escrow: none as far as I know. founders call them fidiuciaries. that's not what a fiduciary is: "a fiduciary is a legal or ethical relationship of trust between two or more parties." [1]

* own equity: none as far as I know.

* promises about the stock price.

I have nothing against the project per se. If the amount would be significantly smaller (say 200k$ should be enough to cover development cost) and there would be transparent escrow I wouldn't mind. The ethical standards required here are extremely high. We can see with kickstarter how such mechanisms evolve. Usually the crowdfunding community helps each other out to establish some guidelines. If those are not followed red flags are raised. This has worked reasonably well as far as I can tell.

[1] http://en.wikipedia.org/wiki/Fiduciary

[spyro]

If I'm honest I see it failing at first. I do however have hope in the coin and feel it will come back strong after the initial failure, they are just being to ambitious right now.

[JakeThePanda]

The IPO price is very high.  They are giving a lot of incentive to invest during the first week the IPO opens because of the bonus for early investors.  If you can't invest in the first couple of weeks, you may be better off waiting for the after-market. I can see the price dropping below .001 at opening.

[coinrevo]

this is not "fundraising". the BTC goes to some address and that's it. there is no accountability. all of this is illegal in Canada for sure. my problem: several million dollars raised through such a process does not help the community at all. quite the opposite.

[jae480]

this is not "fundraising". the BTC goes to some address and that's it. there is no accountability. all of this is illegal in Canada for sure. my problem: several million dollars raised through such a process does not help the community at all. quite the opposite.

do they actually have several million dollars raised or do they want several million dollars?

[coinrevo]

Its getting completely out of hand. Just read this recent comments of vbuterin. Note that none of the code is functional. Its mostly just a whitepaper with some quite outlandish claims.

Is that the future of cryptocurrencies? I don't know what to say, it's just sad.

Why should one group get to control resources without producing something? The person inventing the next better trust model, should come up with a proper mechanism. Whatever gets produced can be forked anyway, so it does not make sense in the first place. Why would want someone use a currency, which is controlled by a corporation, rather than a distributed group of developers? This is moving away from opensource to a corporatist model, which is much worse than the foundation's power grab. Think about it: the goal here is to create a corporation which employs developers and tells them what to do, instead of having an opensource model where everyone can contribute.

People who only want to get rich and control everything, should be ousted. The question is how a community can establish techniques to do that.

http://www.reddit.com/user/vbuterin

We are seriously worried that if we offer a small cap then some large investor will simply gobble it up all at once, and then we'll basically have Ripple. Judging by the response we have gotten so far, we realized that it is entirely possible, even if unlikely, that some whale with 200000 BTC sitting around will decide that Ethereum just might be the right coin to throw 10% into, and we need to work around such a possibility. If no whales come onboard on such a scale, then we will have a small market cap to start off anyway.

That is a good sentiment. However, the problem with relying on github and twitter handles is that we are talking about distributing a large amount of currency units here. If you remember, Ripple tried to hand out XRP to Bitcointalk users, and they ended that strategy for good reason. Do you really want spammers and trolls with tens of thousands of accounts controlled by bots to become the next Rothschild family?

[amlg23]

Whats the latest? Aren't they supposed to be launching their Kickstarter today ?

[empoweoqwj]

this is not "fundraising". the BTC goes to some address and that's it. there is no accountability. all of this is illegal in Canada for sure. my problem: several million dollars raised through such a process does not help the community at all. quite the opposite.

Are they based in Canada then?

[coinrevo]

glad that there is some kind of self-regulation. an epic episode of tragedy and comedy in Act I. now we can wait for Act II.

Are they based in Canada then?

I don't know much about crowdfunding laws, but I'm certain Canadian law does not cover this, especially transmitting money to a holding company. Perhaps in Panama you can do this kind of stuff. I don't mind using laws to the advantages like everybody does, but laws of Canada and that of a banana republic are different. an IPO is incredibly costly. even a tiny stock IPO OTC in the US through reverse merge costs perhaps 1M$, see http://en.wikipedia.org/wiki/Pink_Sheets_LLC#Market_tiers

[empoweoqwj]

glad that there is some kind of self-regulation. an epic episode of tragedy and comedy in Act I. now we can wait for Act II.

Are they based in Canada then?

I don't know much about crowdfunding laws, but I'm certain Canadian law does not cover this, especially transmitting money to a holding company. Perhaps in Panama you can do this kind of stuff. I don't mind using laws to the advantages like everybody does, but laws of Canada and that of a banana republic are different. an IPO is incredibly costly. even a tiny stock IPO OTC in the US through reverse merge costs perhaps 1M$, see http://en.wikipedia.org/wiki/Pink_Sheets_LLC#Market_tiers

Lots of companies start up in Panama. Gives you a lot of "protection" in a number of ways. But not necessarily a sign on its own the company is "bad".