[PRE-ANN][ZEN][Pre-sale] Zennet: Decentralized Supercomputer - Official Thread

[peled1986]

There is no reason of investing using btc, it's just like selling btc to dollars to invest in a start up, and that there's a good chance that if the btc goes up you probably won't get your btc back.
If you buy with 350$ now and the btc goes to 1000$ your 350$ will still be worth 350$, it's actually a waste of btc.

By this reasoning alone, if you believe that the btc price will go up then you should never do anything with a bitcoin except hoard.  While I often see this reasoning I don't think it is sound.  I won't step into the holy war and debate this, it is already a well beaten dead horse.

In any case, why is the denomination relevant at all?  Any argument that you could make for a bitcoin you could also make for any asset, like a dollar or an apple or a share of Apple.  If I invest my apples in zencoin and apples go up I probably wont get my apples back.  I give $350 worth of apples for some zencoin and then those apples become worth $1000 I'll still only have $350 worth of zencoin.  By this logic I should never invest any asset in zencoin if I believe that asset will increase in value, because I might be right and the value of that other asset "might" go up.

Of course this is flawed reasoning.  One really needs to account for potential movement of *both* assets in *both* directions.  One needs to consider not just if apples are going to go up or down, but by what percentage they are going to go up or down relative to the percentage that zencoin will go up or down.

The specific underlying assets are not of actual concern, nor their particular spot prices, only their relative appreciation/depreciation while held.  If I think that there will be more new interest opened in zencoin over some time span than will be opened into bitcoin, relative to their market caps, then it is rational to exchange my bitcoin (some or all) for zencoin over that time period, and then to incrementally re-balance between the two as that new interest enters the market and the price gaps relative to market caps closes.  This is pretty basic economic theory.  If "done correctly" one ends up with a larger valued pile of both bitcoin and zencoin than they had of bitcoin originally.  Of course this is simplified, a real investment house will also have to consider things like the "market sensitivity" or how much their own entry to and exit from both markets will skew the curves.

(I think that if Ohad meets his goals then this will probably be the case over at least a 6 to 12month timeframe, btw!!  Yah, I'm that optimistic about this project - if he does what he intends I firmly believe that new adoption of the technology will (briefly) outpace new adoption of bitcoin.  No joke.  If this thing works or even just "works" there will almost certainly be a mad rush of both publishers and providers.  I don't see people flocking away from AWS or anything (the projects cover different use cases and concerns) but I do see this having the potential of very quickly becoming a dominant technology in the space.)

Someone might be tempted to say "but this is an IPO so it is different from general investment of an open asset" but the fact is that the only real difference is that there is no prior historical trade.  Otherwise the market "functions the same" at the moment of the IPO and forward.

So, if an investor believes that zennet is a better investment than btc then he would invest his *dollars* in zennet.

If an investor believes that asset X is a better investment than asset Y he will trade asset Y for asset X proportional to how much better they believe it to be, possibly adjusted relative to some risk profile.  (Note this says nothing of asset Z.  In your example X=zennet, Y=btc, Z=usd.  You can't cross-relate value comparisons like that unless you start talking about arbitrage.  If you do want to talk about three or more assets then you are looking at hedging between the three *relative* interests, but the premise remains more or less the same from there.)

If they are smart, they will also write out put/call contract pairs to bracket return above a risk free rate to within some acceptable bound of probability.  This is slightly less basic economic theory, but still pretty much "first principles."

All of this is rather off topic discussion, though.  It is not any concern specific to zennet, and is something that is well covered elsewhere.  This isn't an appropriate thread for discussing general economics or investment strategy, IMO.

Good answer 

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[HunterMinerCrafter]

Good answer 

Thanks! 

[ohad]

I think this would mostly come down to constraints of the "IPO" itself, such as how escrow would be handled etc.  Ideally you should offer as broad a base of denomination as possible while still remaining convenient to everyone.  ("I'll send you some apples for zencoins." is probably not logistically viable, but "btc, usd, ltc" should be trivial enough.)

I'm not sure I understood you. If you meant trusting someone else to keep on the BTC of the sale, it's problematic. If it's regarding the Zencoins themselves, they won't come into existence until the network is ready, and at that moment they'll be distributed to their owners.
Add to that the fact that many constrains are arised from legal point of view. Zennet will function as a regular company, offering to buy its products in presale (in ridiculus prices of course), while obligating to supply those products.
Of course, no one (including me nor the company) have any kind of control or income from Zennet after releasing it.

[Hueristic]

I think I said this before, but if not I at least thought it really hard:

I love these Gems.

[ohad]

I think I said this before, but if not I at least thought it really hard:

I love these Gems.

Well that's a master in Gems theory we're talking about

[HunterMinerCrafter]

Let's make some order about the ID POW. I'm including new ideas here, tell me what you think.

Background:

1. When publisher and provider agree, the publisher may now utilize and pay, or not utilize and not pay the provider.
2. Publisher may even only add 3 integers for a whole hour, so after 1hr the payment might even be < 1 Satoshi.
3. If a publisher does not trust a certain address, they should not give a lot of work to that address.
4. We have two ECDSA keys on the system, call them SSH and ZEN. ZEN ECDSA is just like BTC priv/pub key, or: address. SSH is equivalent, for the sake of secure shell connection.

ID POW:

5. If an address begins with 10 zeros, one can quite easily calculate a lower bound for the amount of Zencoins needed to create such address. Say it costs X Zencoins.
6. Now I connect to such a provider and give it work X/4 Zencoin worth. This work should be easily provable (like hashing, matrix eigenvalue problem etc.).
7. Note that I can securely tell my publisher friends that this address is bad, if they miscalculated. How?
7.1. When I began talking with the provider, they proved they own the ZEN key by challenging them to sign a message.
7.2. This proof was done over SSH, signed with the SSH key.
7.3. So I have in my hands a signed conversation, proving its Zencoin origin, and proving that the eigenvalue returned is incorrect.
8. Now, after the provider invested X Zencoin worth of POW on their ID, I have a proof in my hand, which costed me X/4 (at the worst case, if I couldn't run away without paying after I realized I got scammed), and I can prove to the whole world that this X worth addr is malicious.

I'll go back and re-read the irc logs related to this and respond in more detail later.

Regardless of the implementation detail the core philosophy remains the same, identity needs to be scarce/difficult enough to discourage new identity attacks, and yet available enough not to frustrate legitimate new users.  IIRC I concluded that any scheme can work as long as these two (conflicting) concerns are well addressed, but I'll need to review the particulars.

[DonShoshan]

Good luck. I will be backing you at 11/11.

[mishax1]

There is no reason of investing using btc, it's just like selling btc to dollars to invest in a start up, and that there's a good chance that if the btc goes up you probably won't get your btc back.
If you buy with 350$ now and the btc goes to 1000$ your 350$ will still be worth 350$, it's actually a waste of btc.

By this reasoning alone, if you believe that the btc price will go up then you should never do anything with a bitcoin except hoard.  While I often see this reasoning I don't think it is sound.  I won't step into the holy war and debate this, it is already a well beaten dead horse.

In any case, why is the denomination relevant at all?  Any argument that you could make for a bitcoin you could also make for any asset, like a dollar or an apple or a share of Apple.  If I invest my apples in zencoin and apples go up I probably wont get my apples back.  I give $350 worth of apples for some zencoin and then those apples become worth $1000 I'll still only have $350 worth of zencoin.  By this logic I should never invest any asset in zencoin if I believe that asset will increase in value, because I might be right and the value of that other asset "might" go up.

Of course this is flawed reasoning.  One really needs to account for potential movement of *both* assets in *both* directions.  One needs to consider not just if apples are going to go up or down, but by what percentage they are going to go up or down relative to the percentage that zencoin will go up or down.

The specific underlying assets are not of actual concern, nor their particular spot prices, only their relative appreciation/depreciation while held.  If I think that there will be more new interest opened in zencoin over some time span than will be opened into bitcoin, relative to their market caps, then it is rational to exchange my bitcoin (some or all) for zencoin over that time period, and then to incrementally re-balance between the two as that new interest enters the market and the price gaps relative to market caps closes.  This is pretty basic economic theory.  If "done correctly" one ends up with a larger valued pile of both bitcoin and zencoin than they had of bitcoin originally.  Of course this is simplified, a real investment house will also have to consider things like the "market sensitivity" or how much their own entry to and exit from both markets will skew the curves.

(I think that if Ohad meets his goals then this will probably be the case over at least a 6 to 12month timeframe, btw!!  Yah, I'm that optimistic about this project - if he does what he intends I firmly believe that new adoption of the technology will (briefly) outpace new adoption of bitcoin.  No joke.  If this thing works or even just "works" there will almost certainly be a mad rush of both publishers and providers.  I don't see people flocking away from AWS or anything (the projects cover different use cases and concerns) but I do see this having the potential of very quickly becoming a dominant technology in the space.)

Someone might be tempted to say "but this is an IPO so it is different from general investment of an open asset" but the fact is that the only real difference is that there is no prior historical trade.  Otherwise the market "functions the same" at the moment of the IPO and forward.

So, if an investor believes that zennet is a better investment than btc then he would invest his *dollars* in zennet.

If an investor believes that asset X is a better investment than asset Y he will trade asset Y for asset X proportional to how much better they believe it to be, possibly adjusted relative to some risk profile.  (Note this says nothing of asset Z.  In your example X=zennet, Y=btc, Z=usd.  You can't cross-relate value comparisons like that unless you start talking about arbitrage.  If you do want to talk about three or more assets then you are looking at hedging between the three *relative* interests, but the premise remains more or less the same from there.)

If they are smart, they will also write out put/call contract pairs to bracket return above a risk free rate to within some acceptable bound of probability.  This is slightly less basic economic theory, but still pretty much "first principles."

All of this is rather off topic discussion, though.  It is not any concern specific to zennet, and is something that is well covered elsewhere.  This isn't an appropriate thread for discussing general economics or investment strategy, IMO.

99% of the crypto projects (invested with bitcoin) are not traded with dollars nor related to any real world service that is being valued with dollars. that is why I gave the Storj example, so in most cases where I invest in bitcoins I don't need to worry that I lose my bitcoin if it goes up (true that I don't lost my dollar, but I might lose the bitcoin)

If you spend your bitcoins on storj or zencoin then probably the only way you'll end up getting more bitcoins is if bitcoin itself crashes.

Apples or shmapples, nothing changes the fact that spending bitcoins buying dollars is not the way to go for a bitcoin believer.

[atleticofa]

It should be a limit for that 10%.

Anything higher than 100 btc invested will be really risky to all investors.

I'm not going to invest in the coini if there is not a limit. Becauseif you invest without a limit you don't know at what price you are buying, thats not really fair for early investors.

[mr.coinzy]

As an investor you should also be happy (at least partially) if they sell for much more than a limit sum as you suggest (and a limit of 100 btc total is ridiculously low anyway for a project in this scope...) because more money will mean more available resources for development and growth in your investment (facilitating your initial agenda).  

[mrkavasaki]

What is the difference between Storj and zennet?

[ohad]

What is the difference between Storj and zennet?

Roughly:

Computational resources are many: CPU, RAM, Disk, Network....
Storj distributes the Disk part.
Zennet distributes them all.

[bitwhizz]

watching

[flis1986]

Zennet seems like one of the most innovative projects in the crypto sphere

[brandoff]

What is the difference between Storj and zennet?

Roughly:

Computational resources are many: CPU, RAM, Disk, Network....
Storj distributes the Disk part.
Zennet distributes them all.

Storj core dev here.

From what I've read so far about Zennet, it's possible you could run DriveShare farming software inside a container (e.g. instead of a traditional VPS) if you wanted to run an instance remotely instead of on your own computer. I'm also working on an autonomous agents system now that could plug into Zennet's distributed infrastructure nicely too. Can reach out when that whitepaper is done.

One question I have though, how would you be able to prevent someone from tampering with the VM on the host machine, or tweaking it so it feeds you back bad data? It would be nice if there were a system in place so everything inside the container is completely opaque to the host and the communication back-and-forth was entirely encrypted. You could even send some 'tests' once in a while to ensure the host isn't messing with the VM.

[ohad]

Storj core dev here.

Great to see you here

From what I've read so far about Zennet, it's possible you could run DriveShare farming software inside a container (e.g. instead of a traditional VPS) if you wanted to run an instance remotely instead of on your own computer.

Sounds absolutly possible

One question I have though, how would you be able to prevent someone from tampering with the VM on the host machine, or tweaking it so it feeds you back bad data? It would be nice if there were a system in place so everything inside the container is completely opaque to the host and the communication back-and-forth was entirely encrypted. You could even send some 'tests' once in a while to ensure the host isn't messing with the VM.

This topic was well-discussed here. There are many mechanisms for controlling the risk. There is also R&D towards verifiable computing. Just pick an arbitrary comment on this thread, and at least 30% chance it's dealing with those concerns

[NILIcoin]

O.K. let me try to put it in simple numbers for simple people like myself

1. how many coins are 100% ?
so far there is no number and some say it is not really important, which I think is a true statement


2. If I buy coins for 1000$ in the pre-sale, I will not know how many coins I have bought until after the sale, even if by then the total number has been set which it will to my understandings

3. So lets say that the total coin number is 10,000,000. 1M is going for pre-sale , the sell ended up with 5,000,000$ in the vault. this means that each coin price has been set on 5/1 that is 5$ each which means that I am entitled for 1000/5 = 200 coins. If however there are only few interested investors and only 1000$ have been invested then I can got with my 100$ 10% of the coins. (less the percentage to developers and such). these coins worth much less but as an early investor I actually had a great deal. So I would actually try to keep people off the sell, but this will hurt the developers and thus the product I am investing in. This is a dilemma pre-sale buyers would have to deal with. should I try to get as many people on now or not.

4. Now that the price has been set. is it good for me as an investor, that it is high, or is it better that it is low? For a speculation it is better low until it hits the markets and can be sold by early investors. So once again I am better off having the price of the coin stay low.

This all together is a problem for the developers who need to get the coins sell for the highest price possible in order to have the funds for further development .

So is this how it is or am totally wrong?

[NILIcoin]

O.K. let me try to put it in simple numbers for simple people like myself

1. how many coins are 100% ?
so far there is no number and some say it is not really important, which I think is a true statement


2. If I buy coins for 1000$ in the pre-sale, I will not know how many coins I have bought until after the sale, even if by then the total number has been set which it will to my understandings

3. So lets say that the total coin number is 10,000,000. 1M is going for pre-sale , the sale ended up with 5,000,000$ in the vault. this means that each coin price has been set on 5/1 that is 5$ each which means that I am entitled for 1000/5 = 200 coins. If however there are only few interested investors and only 1000$ have been invested then I can got with my 100$ 10% of the coins. (less the percentage to developers and such). these coins worth much less but as an early investor I actually had a great deal. So I would actually try to keep people off the sell, but this will hurt the developers and thus the product I am investing in. This is a dilemma pre-sale buyers would have to deal with. should I try to get as many people on now or not.

4. Now that the price has been set. is it good for me as an investor, that it is high, or is it better that it is low? For a speculation it is better low until it hits the markets and can be sold by early investors. So once again I am better off having the price of the coin stay low.

This all together is a problem for the developers who need to get the coins sell for the highest price possible in order to have the funds for further development .

So is this how it is or am totally wrong?

So let me try and answer some of the problem I have presented here:

first and most important, we are redefining many economics basic assumptions: Introducing a token coin into the equation is like having an equation with two variables rather than one.
The value of the token is a product of both the demand for the service one get using the coin and the supply of both service and token, . This means that one can have piles of cash in their hands but no excess to the service unless having a token in their hands.
Assuming then, that I have all the dollars in the world, the price of the service will be set by the supply of tokens only while having a limited amount of both create a new relationship.

Now if, like in the case of most Altcoins, the coin itself was not a gateway to any service and I can use any other currency to get my product or service, then the value of the coin is driven only by community expectation to draw a user community which will use the currency as a medium of exchange and store of value.

 BTC for example did act as a token for a" none banking" wire  transaction. The value that bitcoin drew was due to it being a token for a service one could not get without it.
 Zennet coin is just like that, only that the service you get is computing, which you can get elsewhere but not sell ellsewhere.
 The service have many other qualities that makes it desirable. unless it get too expensive.
 But here again  the market mechanism is very direct and make  the coin price match demand.

Investors that choose to keep the token as store of value or for speculations can evaluate their investment in real terms as far as demand for service and supply of coins.

Now let me take you back to our pre-sell.
The tokens that we are buying are the  parts of that future supercomputer. It can not work without that essential component. Our coins are the actual part that operate that "machine", but unlike most essential parts of a machine, these you can transfer from one to the other. The tokens a a full representation for the value of the "machine" or rather that future computing  decentralized corporation.
But our tokens are even more than that' they are also the actual contract. some of the things that one day Ethereum will allow to do. are already here as zennet coins

We as first investors still may want to keep the crowd from coming, but our machine is not going to be that developed if the developers dont make enough profit. thus we as investors in a product wants to get as much money invested in the product development. And when I say two variables that is what I mean.

As a pre-sale investor I would solve that paradocs by asking the developers to keep more coins in their possession so they can capitalize on it after the "machine" is in the market and so are the coins. Even if they eventually dump some coins they are going to loose future profit from the product they have created,

[HunterMinerCrafter]

Apples or shmapples, nothing changes the fact that spending bitcoins buying dollars is not the way to go for a bitcoin believer.

"Believing" in bitcoin is not a legitimate reason for trading irrationally.

If you see a trade of zencoin for bitcoin (or vice versa) as having anything at all to do with dollars then you are missing the whole point of relative valuation to begin with, and no argument will be likely to convince you of your mistake.

Pretend USD and other fiat currencies never did exist.  Does your reasoning still hold?  There is no reason that it shouldn't, if it is sound.

[mishax1]

Apples or shmapples, nothing changes the fact that spending bitcoins buying dollars is not the way to go for a bitcoin believer.

"Believing" in bitcoin is not a legitimate reason for trading irrationally.

If you see a trade of zencoin for bitcoin (or vice versa) as having anything at all to do with dollars then you are missing the whole point of relative valuation to begin with, and no argument will be likely to convince you of your mistake.

Pretend USD and other fiat currencies never did exist.  Does your reasoning still hold?  There is no reason that it shouldn't, if it is sound.

I've explained it twice already.

You either get my point and agree, or get my point and disagree. The bottom line is if the btc gonna cost 1000$ next year then I could buy X3 times the amount of process power / service on Zennet than I am now with the same btc.

Of course no one stops you from investing your dollars and I didn't say it is a bad idea, what I said is that spending btc now could cost you in the long term..