rpietila Altcoin Observer

[elviselvis101]

Have you had chance to look at CryptCoin yet ? Another X11 algo coin claiming anon tech. Supposedly releasing their white paper in the coming days. Will have a better opinion once the white paper is out but as of now not much to be said about it although they do claim to be using a setup thats different to DRK's masternode setup.

A lot of this is popping up all around, newbie and anon accounts with promise of anon tech coming SOON,,,
but just in case I started the miner 

[elviselvis101]

I'm not really informed about MON but this thread might just be for rpietila to spread some hype on his last investment (given the reputation he has on this forum).
I think it's really hard for anyone to make predictions for the mid-long term  on the altcoin market.

Its working, just look at my sign 

[Peter R]

It looks like you created a new account specifically to respond to my post questioning the legality of the Nxt IPO.  I think I struck a nerve somehow.  

If any of the founders sold shares to US residents, then I believe SEC registration would have been required.  How is this different than Satoshi Dice?  But SEC registration most certainly did not happen (please correct me if I'm wrong), so I believe the SEC would have a case against any of the 47 initial founders should any of them financially profit by selling their stake to US residents.


EDIT: This is interesting.  Perhaps the Eric Voorhees / Satoshi Dice precedent just killed the IPO model for launching cryptocurrencies.    

It's one of the reasons I dropped the IPO model for MC2. I kind of wonder if it has ramifications for spinoffs too, because with a spinoff of Bitcoin you could buy bitcoins now and get coins for them later.

Someone at the company I work for is talking to some corporate lawyers right now about the legality of these IPOs in general.

Note that a lot of banking for other IPOs seems to be done offshore, too (not naming names), and that they're going so far as to avoid the term "IPO" lately.

I think developers have to start thinking about the Voorhees-issue if they are receiving money (bitcoins, USD, etc) in exchange for some sort of virtual token.  In my mind, this applies to any "pre-mined" coin when it is clear that the pre-mine was effectively "closed."  So this would apply to "insta-mines" too.  

In reality this won't matter for 99% of altcoins because serious money won't be made.  But in the case where a pre/insta-mined coin does take off, then I could see the founders getting the Voorhees treatment (or worse).  

Eventually I think the SEC will lose control here, but until then it is important to understand exactly what the laws are.  It's a shame really, because this probably affects the ability of bitcoin start-up companies to fund-raise via colored coins

[NewWorldBitOrder]

It looks like you created a new account specifically to respond to my post questioning the legality of the Nxt IPO.  I think I struck a nerve somehow.  

If any of the founders sold shares to US residents, then I believe SEC registration would have been required.  How is this different than Satoshi Dice?  But SEC registration most certainly did not happen (please correct me if I'm wrong), so I believe the SEC would have a case against any of the 47 initial founders should any of them financially profit by selling their stake to US residents.


EDIT: This is interesting.  Perhaps the Eric Voorhees / Satoshi Dice precedent just killed the IPO model for launching cryptocurrencies.    

It's one of the reasons I dropped the IPO model for MC2. I kind of wonder if it has ramifications for spinoffs too, because with a spinoff of Bitcoin you could buy bitcoins now and get coins for them later.

Someone at the company I work for is talking to some corporate lawyers right now about the legality of these IPOs in general.

Note that a lot of banking for other IPOs seems to be done offshore, too (not naming names), and that they're going so far as to avoid the term "IPO" lately.

I think developers have to start thinking about the Voorhees-issue if they are receiving money (bitcoins, USD, etc) in exchange for some sort of virtual token.  In my mind, this applies to any "pre-mined" coin when it is clear that pre-mine was effectively "closed."  So this would apply to "insta-mines" too. 

In reality this won't matter for 99% of altcoins because serious money won't be made.  But in the case where a pre/insta-mined coin does take off, then I could see the founders getting the Voorhees treatment (or worse).   

Eventually I think the SEC will lose control here, but until then it is important to understand exactly what the laws are.  It's a shame really, because this probably affects the ability of bitcoin start-up companies to fund-raise via colored coins

The SEC would have to prove NXT was shares. As has been pointed out shares don't get trade as currency. Since soon millions of NXT will be traded as currency, then how is your SEC lawyer friend going to make his case.

Your argument is a stretch at best. Eriks shares were never used as currency.

Just because you don't think it's a currency does mean its not.

The case against currency IPOs is weak at best.

[Peter R]

Now, that IPO type model (which will also be Etherium I believe) isn't necessarily a scam just because it breaks accepted "rules".

Selling shares of a new tech to the market at whatever price the market will bear, is not scamming. I don't have any evidence that NXT is scamming anyone. I have also sold shares of my companies to the public.

What I don't believe is that these things will become currency. At least my shares have never succeeded on that

I'm not sure the IPO model is even legal (in the US) unless the developers register with the SEC.  How is selling shares in Nxt different than selling shares in Satoshi Dice?  We know Mr. Voorhees recently got nailed for this: https://bitcointalk.org/index.php?topic=637435.0

At this point I think it is a semantic argument. These 2.0 currencies can be programmed to essentially do whatever they want.

I don't think they sold it as an IPO, but a few people have commented on it as such. If the intention of the founders can't
be proven in a court of law, then where does it go? And even if it can be proven, I don't think a decentralized network is going
to be taken down anytime soon. I believe it can also just be "forked" as it is open source? This is going to be a huge headache
for the SEC or any government entity that tries to wrangle with it imo.

Fun times are a coming...

I disagree.  Now that I've read up on the Voorhees deal, I think this will become a very big issue if any of these 2.0 currencies really take off.  You said "these 2.0 currencies can be programmed to essentially do whatever they want," but that's not the issue.  The issue is the initial distribution of the coins.  If a "closed group" benefits by selling pre-mined/insta-mined tokens to the public, then I think the SEC could argue that those tokens were unregulated securities.  And in my mind they would be correct in their classification (not that I am defending the existence of the SEC, however). 

Take Nxt for instance: the initial coins were distributed to the founders, who then proceeded to sell them to the public.  Nxt admits this fact openly.  Given the blatant Nxt (and other alt-coin) pumping that goes on here, one could argue that the founders were aggressive in soliciting investment from the public, and argue further that the founders made unfounded and misleading claims to attract investment.  So I think the SEC could come down harder on 2.0 developers who use pre/insta-mines than they did on Voorhees. 

So, yes, I could completely foresee the SEC going after the founders of any "IPO'd" virtual currency who benefitted financially be selling virtual tokens to the public without registering those securities with the SEC. 

 

[nakaone]

bcnext or whatever the name of the initial distributor was is as unknown as satoshi - I doubt this will be an issue in the future.

anyway I think that Proof of Stake is great for blockchain application other than currency - I'm not a friend of Daniel Larimer but his argument not to overpay security and his approach to make blockchain technology profitable is worth mentioning.

for currencies it is more useful if there is another way to get them as to buy them - we can argue if that is or is not the case for bitcoin

[Peter R]

The SEC would have to prove NXT was shares. As has been pointed out shares don't get trade as currency. Since soon millions of NXT will be traded as currency, then how is your SEC lawyer friend going to make his case.

Your argument is a stretch at best. Eriks shares were never used as currency.

Just because you don't think it's a currency does mean its not.

The case against currency IPOs is weak at best.

So if Eric issued his shares as colored coins he would have been OK?  You're telling me that an individual is free to sell shares to the public as long as he calls them coins and as long as those "coins" can be used as currency?  

I am genuinely interested because it would be useful for a start-up company to issue colored-coins to raise money for product development, and then issue dividends directly to those colored coins.  The colored coins could be traded like regular bitcoins, so they would be "currency" in that sense (but really the colored coins represent shares).  

I don't think that would fly with the SEC.  And for the very same reasons, I also think the Nxt launch would be considered illegal by the SEC as well.  In fact, I think earning money by "staking/minting/forging" could be deemed unlawful without SEC registration because this is akin to dividends issued to shareholders (and PoS supporters say this themselves) which falls under SEC jurisdiction.  

[Peter R]

bcnext or whatever the name of the initial distributor was is as unknown as satoshi - I doubt this will be an issue in the future.

The issue is that "based on an injection of 21BTC by 73 original stakeholders, 1 billion Nxt coins were ejected from the Nxt genesis block."





If these original stakeholders solicited investment from the public in exchange for Nxt shares, how could this not be construed as a security offering?  

[NewWorldBitOrder]

bcnext or whatever the name of the initial distributor was is as unknown as satoshi - I doubt this will be an issue in the future.

The issue is that "based on an injection of 21BTC by 73 original stakeholders, 1 billion Nxt coins were ejected from the Nxt genesis block."


https://i.imgur.com/bt6zNBR.png


If these original stakeholders solicited investment from the public in exchange for Nxt shares, how could this not be construed as a security offering?  

Well good luck with the SEC enforcing that.

Good luck finding BCNext and good luck shutting down a decentralized exchange. Good luck with jurisdiction outside US. Good luck not adjusting to the evolution of cryptos.

If the innovators in this industry were as worried as you, there would be no industry.

Satoshi premined bitcoins. How'd that work out?

[Anotheranonlol]

The SEC would have to prove NXT was shares. As has been pointed out shares don't get trade as currency. Since soon millions of NXT will be traded as currency, then how is your SEC lawyer friend going to make his case.

Your argument is a stretch at best. Eriks shares were never used as currency.

Just because you don't think it's a currency does mean its not.

The case against currency IPOs is weak at best.

So if Eric issued his shares as colored coins he would have been OK?  You're telling me that an individual is free to sell shares to the public as long as he calls them coins and as long as those "coins" can be used as currency?  

I am genuinely interested because it would be useful for a start-up company to issue colored-coins to raise money for product development, and then issue dividends directly to those colored coins.  The colored coins could be traded like regular bitcoins, so they would be "currency" in that sense (but really the colored coins represent shares).  

I don't think that would fly with the SEC.  And for the very same reasons, I also think the Nxt launch would be considered illegal by the SEC as well.  In fact, I think earning money by "staking/minting/forging" could be deemed unlawful without SEC registration because this is akin to dividends issued to shareholders (and PoS supporters say this themselves) which falls under SEC jurisdiction.  

So IRS says Bitcoin is property in black and white but when you inject a little color into them they've gone full circle from currency to shares?

Do you feel "premined" proof-of-burn distributed currencies like counterparty would fall under team america world police-  securities division purview?

[smooth]

So IRS says Bitcoin is property in black and white but when you inject a little color into them they've gone full circle from currency to shares?

Ignoring that the IRS and SEC don't have to use the same interpretation to enforce different laws, this statement makes zero logical sense since shares considered property by the IRS. The rules they apply to bitcoin are the same rules they apply to stocks.

[Peter R]

Well good luck with the SEC enforcing that.

So IRS says Bitcoin is property in black and white but when you inject a little color into them they've gone full circle from currency to shares?

There are three issues here that are being muddled together:

1.  What do current SEC regulations say about selling pre/insta-mined coins (e.g., in an IPO-like offering), issuing colored coins (e.g., to fund development), or creating other innovative crypto-based assets and soliciting public investment?

2.  Regardless of the answer to #1, under what conditions is the SEC likely to attempt to enforce these regulations?

3.  Is SEC involvement in crypto-space a good or a bad thing?

In regards to Point #1, it is my opinion that both selling pre/insta-mined coins and issuing colored coin that act like shares, bonds, or options would fall under SEC jurisdiction if investment from US residents was solicited.  I would actually like to be proven wrong here, but the Voorhees deal sets a precedent in my opinion.

[orinoco]

2.  Regardless of the answer to #1, under what conditions is the SEC likely to attempt to enforce these regulations?

3.  Is SEC involvement in crypto-space a good or a bad thing?

In regards to Point #1, it is my opinion that both selling pre/insta-mined coins and issuing colored coin that act like shares, bonds, or options would fall under SEC jurisdiction if investment from US residents was solicited.  I would actually like to be proven wrong here, but the Voorhees deal sets a precedent in my opinion.

I'm suddenly wondering whether Monero's change in ticker to "XMR" is a preemptive move to fend off future allegations from the SEC?  Having a currency ticker which confirms to ISO 4217 for Currency Code is a pretty clear argument against it being shares.  We might be about to see a whole raft of coins change tickers?

[AlexGR]

It's better to have "fluidity" regarding what you call virtual currencies.

Thing is, not all countries revolve around what the US authorities think. Some countries (with serious inflation) have a lot of capital controls in place for currencies so that they can stabilize their national currency... So by hard-defining it as currency you can "solve" one problem but "create" many others.

[Keyboard-Mash]

I don't think nearly enough people know what ISO standards are.

This link gives a pretty good overview: http://www.iso.org/iso/home/about.htm

ISO (International Organization for Standardization) is the world’s largest developer of voluntary International Standards. International Standards give state of the art specifications for products, services and good practice, helping to make industry more efficient and effective. Developed through global consensus, they help to break down barriers to international trade.

If anything, using these standards increases fluidity greatly .. without much of a defined political aspect. They are a tool to increase fitness, and shouldn't be taken lightly.

A decent link for ISO 4217 standards : http://iso4217.net/

[atoni]

Why did monero get removed from coinmarketcap.com? Because of change in ticker?

[GreekBitcoin]

Why did monero get removed from coinmarketcap.com? Because of change in ticker?

I see it just fine on coinmarketcap. And yes it was removed because of the change.

[atoni]

Yes, its back now.

[Carra23]

rpietla is here too? Has he started selling excel sheets yet

Seriously, discussion on the last couple of pages is quite interesting.

[loopgate88]

rpietila, I am very surprised that you are not invested in NXT. Between the java platform, proof of stake done correctly and decentralized exchange it is definitely a value adding block chain.
The bigger the idle stake, the bigger your interest in keeping the system working and you can act upon this by simply holding on to your stake. With bitcoin, miners for example have a big say on the state of the system even if they hold no btc. In NXT, on the other hand, the only entities with a significant say in the state of the system are the ones holding actual stakes in the system.