Founders and Issuance

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Comments

  • ctindallctindall Member Posts: 18
    Just buy some BTC with it.
  • MarioMario Member Posts: 7
    Why is it delayed 7 days?
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    Mario I don't think it's been delayed, just that the language use pre-announcement in the whitepaper could have been construed either way. Here lies the danger of pre-releasing information - on one hand you gain the benefit of rapid iteration based on customer feedback prior to announcements, on the other you expose yourself to risk of people 'skimming' through the content and drawing the wrong conclusions :)
  • MarioMario Member Posts: 7
    Wasn't it "funding starts 26th january"?
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    It was, in my mind, yes, but clearly I had misread it too :) No big deal, personally I much prefer something along these lines as they are going to be very busy in Miami and a good fundraiser launch requires focus.
  • bitmiggybitmiggy Member Posts: 1
    I'm dubious of the fund raising but am a fan of the concept. My problem as an investor is the upper limit on investment. At 30,000 BTC IIRC then any investor has to accept that as the company valuation since investments up until that amount reduce previous investors' share. There is no way of knowing whether this value will be hit, so it has to be considered the actual final value until we know different.

    This valuation is too high since it values the 'start-up' at >$24m - immediately a significant coin, giving large scope for the investment losing value or failing to gain much. The very first investors get 2x later ones, which also feels too low for the risk involved early on, including compared to other funding models.

    An upper limit of 15000 BTC would still provide significant funding while lessening investor risk, and a 4x starting scalar for early investors again lessens risk.
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    moved to -> investment
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    (deleted xposting + comments on said xposting).
  • JasonKJasonK Member Posts: 2
    Can someone help me understand why the Ether currency is being rolled out and tied to the Ethereum software platform? The problem I see is the excitement for the ethereum platform seems to be creating a lot of the interest in the ether currency. Isn't the long-term success of those two things completely independent? The software might be brilliant and make the founders extremely rich. On the other hand the ether currency might die. What am I missing?
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    @JasonK - without 'fuel' to power the contracts then people would be writing infinite loops.
  • JasonKJasonK Member Posts: 2
    I may be wrong but isn't Ethereum at it's core the fire pit? I believe in the Ethereum project and it's long term success. I want to invest in that. How does buying Ether achieve this goal? How is the success of the software platform going to reflect the success of ether?
  • mpolaviejampolavieja Member Posts: 20
    @JasonK

    Because the contracts need computing resources in order to run, so the contracts will will have to pay for those computing resources. Ether will be the currency to purchase computing power for ethereum contracts.
  • FredDaggFredDagg Member Posts: 2
    I totally disagree with this comment made earlier.... "The founding organization needs to be heavily incentivized to continue developing and promoting the system.". If this were the case, there must be something seriously wrong with the system that good quality developers aren't getting on board.

    My concern, and initial impression, is that the founders are double dipping with the proposed issuance. 12.5% to fiduciary members and early contributors, PLUS 12.5% towards salaries, expenses & rewards ???
    - What Expenses? "Let's all take our families to a 'conference' in Brazil during the world cup" expenses? "Oh look, iPhone 6" expenses?
    - Whose Salaries? Will it pay my salary as a 3rd party developer? Will it pay ongoing salaries to founders? If so, how much & for what? This information must be public.
    - What is the proposed breakdown of Salaries, Expenses & Rewards from the 12.5%. Is it 5% Salaries, 5% Expenses, 2.5% Rewards ???
    - What rewards will contributors to the open source code get?

    I would like to see much more detail on this.
    At the moment I can't see myself taking part in an IPO under these terms.
  • davidpbrowndavidpbrown London, UKMember Posts: 15
    edited March 2014
    I'm not sure where 12.5% follows from; the white paper detail seems to suggest X and amounts relative to that seem to be 15% [fiduciary members and early contributors, released over three years] and 15% [long-term reserve pool to pay expenses, salaries and rewards in ether after the launch] - of total 1.5X.

    If all payments are in Ether, then there is incentive for devs to make Ether useful; which is want we want.

    What perhaps matters is that the founding organization of devs is heavily supported; so that they can brute force problems where necessary and focus on quality. Worst case would be a rush to action something imperfect because of an avoidable stress. If ether takes off then the value of any substaintial share will be silly money.

    I've less issue with those clever enough to have already been heavily involved, getting any share of the order proposed.

    I wonder then that such rewards are better placed in the hands of those individuals, than gifted to a new organisation that might suffer from its management; that is, leave the power with the productive staff.
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    @FredDagg We haven't announced anything yet. Of course all this information will be public before the sale take place. There will be both fully transparent internal AND independent, public accounting.

    If we're off to buy "iphone6 and holidays for our families" as you so kindly put, everyone will know, and embezzlement is a crime last time I checked. Furthermore our identities are publicly known.
  • BillyBilly Member Posts: 5
    edited March 2014
    The current early "investor" model frightens me.

    In the current pre-sale model, the initial investors assume ALL of the risk of the Ethereum project. Investors pay a large sum of money to obtain Ether which is not only highly diluted by the current mining schema, but also goes towards generating a ludicrous amount of Ether (from an economic standpoint) for the founders.

    Where does the founder risk come into play? What are the founders putting on the line here? If the founders fail, they walk away with millions of dollars in Bitcoins. If the founders fail, the investors lose everything.

    I would like to see some sort of rollout plan which puts the founders on the line; which puts them at risk if they fail, and which gives them a larger incentive to make Ethereum a flourishing reality.

    An alternative to the current pre-sale could be: For every Bitcoin invested, 1000-2000 Ether is created. Then, an amount equal to 25% of all ether created by investors is opened up to the founders for purchase. Since the founders would basically be paying themselves for Ether using the money generated by investors, founder Bitcoin spent on the purchase of Ether would be held by the organization and would not be usable for a period of 5 years, solidified by an Ethereum contract which could double as an initial means of showing the world the power of Ethereum.

    I am tired and thought of this alternative in literally 5 minutes, so I am sure there are flaws. But my point is, investors currently assume ALL risk at the moment, for minimal returns. I would like to see some something where the founders must buy in as well. With this, investors and founders would be united, both fighting the same battle for the success of Ethereum. The current model seems to pit investors against the founders, as investors think the founders are profiting too much, and creates a sense of hostility that will not be productive.

    Thanks for reading.
    Post edited by Billy on
  • Captain_PicardCaptain_Picard Member Posts: 9
    edited March 2014
    @Stephan_Tual I think Ethereum would be better off just issuing a % of Ether to the early devs and Founders instead of conducting a one-time IPO style fundraiser. I don't have a problem issuing (pre-mining) 12.5% or whatever % to the early contributors to Ethereum, the problem occurs when the Founders are able to cash out immediately or relatively soon after the initial IPO.

    By just issuing Ether to early contributors to the platform, you would let the team figure out how to make those Ether valuable in the future. At that point everyone would have an incentive to build all of the apps on top of Ethereum that will provide real value to the world, rather than having investors fund the platform itself with no real plan for how those funds will ensure long term value of Ether.

    By paying lots of Ether for early contribution (but little to no cash) it functions a lot more like holding equity than receiving a fat paycheck, and this style would avoid all of the jurisdictional and corporate layers they are trying to build in Switzerland to protect Ethereum from the SEC and other regulatory risks.

    If real cash is needed to advance the development of Ethereum, maybe it should be raised crowdfunding style on an app by app basis, so investors could buy Ether to fund actual apps to be built on top of Ethereum that would serve a valuable function, rather than funding a platform that by itself will be worthless if not used or built upon. So after the initial distribution of Ether to the founders, it is up to anyone who has an idea for an app to solicit funds for their idea to be built on top of Ether. As an investor, I'd rather fund an app that people will use than fund the language it is written on, because the latter will benefit greatly from the former.

    This concept is the equivalent of rewarding groups like Counterparty who built a valuable app on top of Bitcoin (instead they are getting the opposite treatment). Anyone who wants to build a valuable app on top of Ethereum could do their own mini-IPO by creating an asset on top of Ethereum and enabling investors to buy a stake in that app with Ether.

    So instead of the Ethereum founders deciding what to do with 50 million dollars, you have dozens or hundreds of smaller teams attracting smaller amounts of speculative investment on an app by app basis. The $50 million (or whatever amount is eventually raised) that would have gone to a single Swiss bank account controlled by the Founders will instead go to hundreds of smaller app building teams. All Ether holders will gain from this as Ethereum becomes more useful in the future, and by holding large initial stakes of Ether, the Founders also stand to gain substantially from this outcome.

    The analogy is as follows: Do you spend all the money just getting the rocket in the air, or do you align investments with a valuable service in mind (ask NASA how the former worked out, and ask Virgin Galactic about the latter)?
  • StephanTualStephanTual London, EnglandMember, Moderator Posts: 1,282 mod
    edited March 2014
    @Captain_Picard - "the problem occurs when the Founders are able to cash out immediately or relatively soon after the initial IPO": they won't be, simple as that.

    I think you're going to be pleasantly surprised with what we have been working on. It goes much further than 'investing in teams'. Can't wait to present this to everyone, but give us a bit more time. Cheers!
  • Captain_PicardCaptain_Picard Member Posts: 9
    @Stephan_Tual Thanks for the reply. Glad you guys are thinking deep on this one. Sorry if I jumped the gun on what you were or were not planning to do... can't wait to hear about what you can't wait to present!
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