**** Official Ethereum QA thread ****

[charleshoskinson]

But that is one in the same ... it's really a turn-off for investors when you're asking money from them and then immediately diluting their shares with the premine.

The premine is used to pay current and future developers as well as serve as a long term endowment for the project after the bitcoin reserves run low. As for a turn off, silicon valley has been accepting that people who start companies have equity in the company for over 50 years. This is what built apple and google. It makes people work harder and have a vested interest in the long term growth of the market. If I just pay you a salary, then you can walk away with a clean slate.

We are not a company but we are not a traditional open sourced project. It's really something new and a test for a different way of doing VC. My hope is that our model can eventually be refined and become a permanent part of the startup landscape for projects that don't have equity in a traditional sense and are more mission oriented than profit.

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[acorcos]

If investments are in BTC, how will anyone differentiate US investors to the rest of the world?

+1

[charleshoskinson]

If investments are in BTC, how will anyone differentiate US investors to the rest of the world?

IP blacklisting, similar to Satoshi dice. It's not an effective means technologically, but legally it satisfies our end. I am working very hard to make sure we can accept US investment; however, it's still a topic for debate.

[rdnkjdi]

But that is one in the same ... it's really a turn-off for investors when you're asking money from them and then immediately diluting their shares with the premine.

The premine is used to pay current and future developers as well as serve as a long term endowment for the project after the bitcoin reserves run low. As for a turn off, silicon valley has been accepting that people who start companies have equity in the company for over 50 years. This is what built apple and google. It makes people work harder and have a vested interest in the long term growth of the market. If I just pay you a salary, then you can walk away with a clean slate.

We are not a company but we are not a traditional open sourced project. It's really something new and a test for a different way of doing VC. My hope is that our model can eventually be refined and become a permanent part of the startup landscape for projects that don't have equity in a traditional sense and are more mission oriented than profit.

Take it for what it's worth.  My biggest problem with this was using Ethereum to try and fund V2, V3, V4, V5 upfront.  I have no problem with the amount the founders are taking.  But it seems like the massive premine is imposing a HUGE tax on the present at the expense of lowering the probability it will fly in the first year.  If it doesn't fly in year one, it won't. 

If it works - the ongoing tax should sustain it after year one.  

My vote is lower the premine, up the recurring tax.  Even if I understand why you are trying to eliminate the pump and dumpers initially ... if it doesn't fly in the first six months.  It probably isn't going to.  Seems to me initial premine is lowering your chances of success. 

[ddink7]

The premine is used to pay current and future developers as well as serve as a long term endowment for the project after the bitcoin reserves run low. As for a turn off, silicon valley has been accepting that people who start companies have equity in the company for over 50 years. This is what built apple and google. It makes people work harder and have a vested interest in the long term growth of the market. If I just pay you a salary, then you can walk away with a clean slate.

Agree completely. In the business world, this is called "Golden Handcuffs." It aligns the interests of all involved parties.

[ddink7]

But that is one in the same ... it's really a turn-off for investors when you're asking money from them and then immediately diluting their shares with the premine.

The premine is used to pay current and future developers as well as serve as a long term endowment for the project after the bitcoin reserves run low. As for a turn off, silicon valley has been accepting that people who start companies have equity in the company for over 50 years. This is what built apple and google. It makes people work harder and have a vested interest in the long term growth of the market. If I just pay you a salary, then you can walk away with a clean slate.

We are not a company but we are not a traditional open sourced project. It's really something new and a test for a different way of doing VC. My hope is that our model can eventually be refined and become a permanent part of the startup landscape for projects that don't have equity in a traditional sense and are more mission oriented than profit.

Take it for what it's worth.  My biggest problem with this was using Ethereum to try and fund V2, V3, V4, V5 upfront.  I have no problem with the amount the founders are taking.  But it seems like the massive premine is imposing a HUGE tax on the present at the expense of lowering the probability it will fly in the first year.  If it doesn't fly in year one, it won't. 

If it works - the ongoing tax should sustain it after year one.  

My vote is lower the premine, up the recurring tax.  Even if I understand why you are trying to eliminate the pump and dumpers initially ... if it doesn't fly in the first six months.  It probably isn't going to.  Seems to me initial premine is lowering your chances of success. 

What "ongoing tax" are you talking about? There is no ongoing tax. What they get through the premine is it, period, end of story.

[charleshoskinson]

What "ongoing tax" are you talking about? There is no ongoing tax. What they get through the premine is it, period, end of story.

Exactly, and even if we wanted one, then we'd get forked. The market has no incentive to pay a tax even if its good for the network. One and done and then get it done.

[jubalix]

I don't quite see how the price to execute etherium code will be determined.

there has to be some sort of clever system based on realtime or near realtime demand for, well what ever the limitation is to get things into the next block?

I am also wondering if some sort of of chain processing can be done, and results are somehow integrated back into the etherium chain, that can be verified thus reduce bottle necks.....


it could be an etheirum fork would set fees lower......

[rdnkjdi]

What "ongoing tax" are you talking about? There is no ongoing tax. What they get through the premine is it, period, end of story.

Exactly, and even if we wanted one, then we'd get forked. The market has no incentive to pay a tax even if its good for the network. One and done and then get it done.

For some reason I was thinking there was an ongoing 12.5% (or some amount) allocation of released coins going back into the pre-mine fund for ongoing development.  Most of the information has been taken down - I stand corrected.

Something I'd like to point out is that there is a difference between releasing a currency and a search engine.  Not sure there is a "right" way to do it insomuch as ... comparing this to Google or Apple or Microsoft doesn't seem equitable to me.  I get incentivizing founders and I'm ALL for it.  And building warchests for development - all for that too.

But when trying to justify allocations to the screamers (many of whom should be ignored) - I think it's important to remember at some level releasing a currency type platform is quite a bit different than company built around advertising, marketing, or operating systems.

[Vitalik Buterin]

But that is one in the same ... it's really a turn-off for investors when you're asking money from them and then immediately diluting their shares with the premine.

I don't see why so many people think of it that way. When you're getting VC funding for a startup, it's common practice to hand out something like 10-20% in the first round. Nobody ever thinks of that as some kind of evil plot where you sell the company and then pull the rug out from under the hapless venture capitalists and dilute them 80-90%; people think of it as, well, you creating X shares and only handling out 0.1X-0.2X to the VCs. It's the same here; we're taking preorders for 67% of the initial issuance instead of 100% of the initial issuance.

Can't a Finney attack be combined with a very long-running transactions to DoS all nodes? If a miner earns all block fees then even without a Finney attack a malicious miner could include a lot of long-running transactions into their block to slow down processing of the next block / transactions.

Actually, we never were planning to have a miner collect more than 50% of transaction fees. Now, we're debating between 0% (tx fees burned), 50% and something in between.

[kdrop22]

Thanks, for coming up with such an innovative idea. I am cool with the founder receiving their share, this is part of the corporate IPO process.
However, as with any top innovation, this project carries a great deal of risk which is borne by the IPO investors and founders. The 0.4X inflationary model exacerbates this risk. Would it be possible to decrease this inflation to a more manageable number.

[Come-from-Beyond]

Can't a Finney attack be combined with a very long-running transactions to DoS all nodes? If a miner earns all block fees then even without a Finney attack a malicious miner could include a lot of long-running transactions into their block to slow down processing of the next block / transactions.

Actually, we never were planning to have a miner collect more than 50% of transaction fees. Now, we're debating between 0% (tx fees burned), 50% and something in between.

And what about the Finney-like attack?

1. Alice finds a block but doesn't send it to peers
2. Bob finds a block and sends it to peers
3. Alice sees this coz she connected to a big part of the network
4. Alice sends her block to peers
5. Some nodes accept Alice's block, some accept Bob's one
6. The next block triggers chain reorg that invalidates Alice's block with some probability (if she knows who r the biggest miners then she shouldn't send her block to them to make this probability very high)

The catch is that Alice's block contains very long-running transactions and nodes that accepted it wasted their computational resources. The situation becomes worse if such the nodes r computing her block when the next one arrives.

[surfer43]

I think you should say 10000 wei = 1 ether 
watching 

[high110]

What are the legal issues holding up US investors?  Is it the risk of being accused a money launderer? Seems the new "witch".

[NullOp]

Does ethereum permit people to make transactions containing executable code in the blockchain? So it's like a huge botnet?

[jubalix]

But that is one in the same ... it's really a turn-off for investors when you're asking money from them and then immediately diluting their shares with the premine.

I don't see why so many people think of it that way. When you're getting VC funding for a startup, it's common practice to hand out something like 10-20% in the first round. Nobody ever thinks of that as some kind of evil plot where you sell the company and then pull the rug out from under the hapless venture capitalists and dilute them 80-90%; people think of it as, well, you creating X shares and only handling out 0.1X-0.2X to the VCs. It's the same here; we're taking preorders for 67% of the initial issuance instead of 100% of the initial issuance.

It could be because crypto's are money itself, not just another VC startup. The former relies on the shear force of the idea itself, the latter relies upon a huge kickstart, makes a lot of people take risk.

ETH = best thing since sliced bread and eth needs $100 Million (or whatever) does not compute.

Further BTC, LTC and PPC has proved that you can do it with out asking for huge funds up front, and those three are in the top market cap.

Sunny King exemplifies good practice. He spent a year on PeerCoin, and was out their having to buy up, mine or mint his own product. Zero premine, zero funding. The Same for XPM.

SK goes to the point of refusing donations.

so far in ETH, you are going to
raise 30K btc, that puts you $20~30 Million
then, do a premine as well.

Its hard to think of any thing else that has anything near this in startup terms, in crypto's, ripple maybe.

I'm not saying the ETH offer is wrong, or bad, but his IPO model garners a lot of negative feed back.

However this why a judge can never judge himself, thats why

"You don't see why so many people think of it that way."

It would be near impossible to be objective in your position, thus this weights out the counter argument in your mind. Wetware usually cannot occupy a subjective domain and function objectively.

[Vitalik Buterin]

Can't a Finney attack be combined with a very long-running transactions to DoS all nodes? If a miner earns all block fees then even without a Finney attack a malicious miner could include a lot of long-running transactions into their block to slow down processing of the next block / transactions.

Actually, we never were planning to have a miner collect more than 50% of transaction fees. Now, we're debating between 0% (tx fees burned), 50% and something in between.

And what about the Finney-like attack?

1. Alice finds a block but doesn't send it to peers
2. Bob finds a block and sends it to peers
3. Alice sees this coz she connected to a big part of the network
4. Alice sends her block to peers
5. Some nodes accept Alice's block, some accept Bob's one
6. The next block triggers chain reorg that invalidates Alice's block with some probability (if she knows who r the biggest miners then she shouldn't send her block to them to make this probability very high)

The catch is that Alice's block contains very long-running transactions and nodes that accepted it wasted their computational resources. The situation becomes worse if such the nodes r computing her block when the next one arrives.

Okay, that seems like it can work and cause nodes to waste computational resources. But the cost of such an attack is very high, as Alice needs to  do the attack instead of mining an entire block. Furthermore, miners should only broadcast a block once they are done processing it, so Alice would not reach very many nodes with her block. The issue can also be mitigated with a software change: when a node hears about Bob's block and the successor to Bob's block, and it is still processing Alice's block, it can start processing both in parallel, and then when it finishes the successor to Bob's block it would pause processing Alice's because Alice's block would not be the longest anyway. Thus, Alice is only slowing processing down 2x for one minute. So my intuition is that this is one of those "interesting in theory, not particularly worrisome in practice" situations like selfish-mining.

[Vitalik Buterin]

Does ethereum permit people to make transactions containing executable code in the blockchain? So it's like a huge botnet?

Ethereum has the limitation that every node needs to process every transaction, just like Bitcoin. So on the computational side, it's not more powerful than a single smartphone from 1999. Hence, I don't think saying that Ethereum "is a botnet" is accurate. Can Ethereum be used to help monetize other botnets? That is a more interesting question; I suppose with the decentralized dropbox protocol you can also earn money by renting out other people's hard drives, but an unknown program taking up lots of disk space is something that would be very easy for antiviruses to detect.

[jubalix]

vitalick could you please answer

[1] I don't quite see how the price to execute etherium code will be determined.

there has to be some sort of clever system based on realtime or near realtime demand for, well what ever the limitation is to get things into the next block?

it could be an etheirum fork would set fees lower......

etherium = a bundle of switches, how do you price using a switch? ( iasked the same question of master coin and still don't have  an answer....)

[2] I am also wondering if some sort of of chain processing can be done, and results are somehow integrated back into the etherium chain, that can be verified thus reduce bottle necks.....

[charleshoskinson]

it could be an etheirum fork would set fees lower......

I still think there is some confusion about fees here. Fees do not go to ether holders nor the project developers. The fee structure has no impact on who owns what.