If you’ve read my last few pieces, you’ll be aware of my recent fascination with the biggest trend in the crypto-coin world right now, ICOs, or initial coin offerings (yes, it’s a horrible name).
Since the best way to learn about stuff is to dive right in and do it yourself, I spent much of yesterday getting prepared for the Basic Attention Token (BAT) sale in an attempt to participate. Considering I had very little to do with Ethereum up until that point, the learning curve was quite steep. Nevertheless, I got it all together and had an ERC20 wallet funded and ready to go for this morning’s sale. While I thought the ICO might be pretty popular, $35 million is still a decent amount of money and I didn’t foresee having any real issues with getting an allocation. I couldn’t have been more wrong.
At the end of the day, I got zero BAT tokens and was left extremely frustrated with how the whole thing went down. While it’s undoubtably a historic moment for the nascent ICO market and an incredible achievement for an experimental browser monetization model to raise such a sum in less than 30 seconds, could this really be called a crowdsale?
While details still seem a bit sketchy, what’s clear is that a lot of people are very pissed off and a very small number of players seem to have received a huge chunk of the offering.
Here’s what Coindesk reported:
Only around 130 people were able to buy the tokens today, with five buyers scooping up about half of the supply. The top 20 addresses in the token sale control more than two-thirds of all BAT, according to Joseph Lee, founder Magnr bitcoin exchange, who conducted a post-sale analysis.
The fast nature of the ICO has drawn some ire online from users that were hoping to buy into the token but were quickly shut out. However, the company has so far sought to portray the sale as a success.
If that’s right, I have a real problem with it, and don’t think the term crowdsale is an appropriate term for what happened. In fact, part of why I became so excited about the potential for ICOs was related to a potential leveling of the playing field when it comes to participating in capital raises. Here’s what I wrote in last week’s post, :
Innovation in the crypto world will continue until one day we will actually see equity offerings in startups to regular people as opposed to just allocations to the wealthiest clients of brokerage firms. The innovation in this space has the potential to flatten the world of investing in a meaningful and powerful way, starting today with tokens, but ultimately in many other ways as well. It’s gonna take time, but it’ll happen.
I’m not sure exactly what went wrong and how they could have avoided the allocation issues this ICO seemed to have, but I really hope it’s used as a learning experience for future token sales. For one thing, it appears the cap of $35 million was simply too low. The company vastly underestimated the demand situation, and who really benefits from the low amount of money raised here? Mainly the few individuals who actually got the BAT tokens and can then flip them in the secondary market at a huge markup. It would have been better if that money had went to the company to build out its platform. Even if the cap was much higher, who knows, the thing could’ve still sold out in 90 seconds or something, but 24 seconds is completely ridiculous.
Meanwhile, it appears people were willing to spend thousands of dollars in transaction fees to cut the line. Here’s what Ethereum co-founder Vitalik Buterin noted on Twitter earlier:
https://t.co/oiFGyh1iju This is a $2220 tx fee, used to cut in line in BAT ICO. “Ethereum avg txfee $1” statistics include stuff like this.
— Vitalik Buterin (@VitalikButerin) May 31, 2017
This seems to imply that anyone with big pockets who can afford to pay thousands in transaction fees to get a huge allocation will always be able to squeeze out the little guy in ICOs. Is this what we want? It’s not what I want.
Going forward, it’ll be interesting to watch how other ICOs handle their offerings in the coming months given how hot the space is right now. Will lessons be learned from the BAT sale? What are some viable options to ensure these new capital raising strategies are actual crowdsales where a wider number of people can actually participate, as opposed to just a playground for crypto oligarchs? Only time will tell, but Vinny Lingham’s Civic will certainly be closely watched.
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Michael Krieger
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A crowdsale requires a crowd.
Stretch those 24 seconds to a time span of 8 years and you have in some sense the same story with bitcoin.
Be careful of the crypto currency bubble. I feel it is about to burst.
“Only around 130 people were able to buy the tokens today, with five buyers scooping up about half of the supply.”
Well, for me, that says it all. What exactly is their plan with this currency? To replace bitcoin and reap the rewards? Do some high profile crime w/ patsies and make all crypto-currencies look bad? …
As an aside, have you ever looked into the elites’ suppression of cold fusion and other breakthrough technologies? Brilliant Light Power is the deep state energy solution. SPAWAR and others got results in cold fusion for a long while (see stan szpak et al). Mills, the guy who does Brilliant Light Power, worked at Wright Pat for a while.
Your story is a prime example of irrational exuberance.
It’s an example of human behavior. It doesn’t ever seem to change. The same greedy, me first, capitalists that want to win at all costs and don’t like a level playing field are also in the crypto world.
It shouldn’t be allowed to pay a higher fee to get a higher place in line for your transaction.
This is how it’s always been with IPOs now ICOs..:(
Once again idealism and a desire to democratize opportunity in society is shown to take a distant second to the potential of instant riches for a very, very few. Until those with the ability to change the course of our present preoccupation with “vast wealth for me, nothing for thee” embrace “let me enrich myself while helping the little guy do the same,” this will be SOP.
I completely understand why people want to get in on something that could be the next Big Thing. But I think it needs to be seen as Big Pharma, Big MIC, Big Government, , Big Ag, Big Finance are understood: just the latest tool to allow the disparity of wealth and influence to increase, sowing social discord and eventual eruption by those who are disenfranchised.
I have chosen to separate as much as possible from all those Big’s above. Just as a matter of responsibility in our rapidly crumbling polity, I choose to do the same with any innovation that has as its basic matrix a continuation of the same crippling pathologies that already infect most of our social institutions.
well put. hegelianism, means that the more things change………
i don’t see bitcoin really changing things for the better, i think it is extremely succesful becuase it represents an acceleration of globalism , and another vital technological tool for pushing flows of developing nations capital into western world capital.
if a technology can be copied and used against western hegemonic interests———-such as NUCLEAR WEAPONS——–then you would be seeing a similar attempt by western powers to subvert it’s use by counter hegemonic locii. you are seeing the opposite with bitcoin . this is a sure sign that at least for now it is playign the role of pushing forth western oligarchic hegemony.
Hi everyone! I want to know if compensate to buy some via liqui? or its just the first minutes that would be interesting to buy? what you say?
Hey have you tried mining crypto? That strikes me as a much more organic supply/demand system…this just reeks of speculation…
Again, mining works for….
……very few first days (read: for those at the start of the Ponzi)
……those with huge and expensive mining farms (read: 1% of cryptocoin world).
This winter some Z-currency eas introduced. Made my desktop mining it non stop for a month+. Even got something about 0.01 for participation.
Another thing with e-trade is microseconds. Robots can always bet faster than human, and fast robots yet faster. That means, big money owning big iron and affording eggheads to program them have a natural advantage.
In USSR the shop would say “no more that 5 boxes to one hands” and go back to queue start. But in anonymous cryptocurrency world there’s no way to say in advance and for sure when few wallets are same person or not.
excellent product with the capacity as stated. Much more comfortable than the huge one that I used to have.https://www.amazon.com/dp/B00SHORFYA
Hi! I definitelly will start to minner something, but I want to create a mini farm, since i live in brazil in the rural zone and the electric fee its very low. but I’m studing the best possibilitys yet! If someone could direct me to a good orientation about that I would be thankfull!
ah the ico people. i met the lead guy who created tizen in march. he was eurphoric when i spoke with him. things got so hot they delayed their ico in april, from may to june.
honestly , i don’t care what the tech is. bitcoin represents a fake monetization model.
it CANNOT be verified as independent from the USD stock market bubble until it is made illegal by the fed occ and treasury, only then will you know the real market value of bitcoin as an independent form of money.
as for the altcoins. every last one of them, especially ethereum , represent the pets.com bubble of 1999. sure, a smart contract bitcoin will make sense 20 years from now. and eventually one of them, just like amazon.com, will make a lot of money selling smart services on the blockchain ( like amazon sells dog food) but pets.com never had anything but profit losing revenue, and little at that. similarly, almost no one uses a smart contract to provide a service that brings in revenue. no one.
this is all totall bullshit based on speculative hype about future business models that may or may not exist.
frankly, i think there is at least more sense in that hype than in the idea that bitcoin will remain legal for conversion in to usd as a form of money one day. it is still technically considered an asset that must be taxed when converted to usd. that said, bitcoin still represents the dominance of western business models and it’s current price is based on a valuation that incorporates a counter culture narrative which can be nothing but bullshit until bitcoin is made illegal.
bottom line is that bitcoin is very much a part of the system and it’s continued integration into the western system bodes veyr well and bullshit for it. that said————-it still seems destined to be made illegal one day, whereas smart contracts do not. perhaps there is some method to the madness of ethereum becoming worth more than 50% the pricecap of bitcoin within 2 years from its ico when bitcoin has taken 8.
kreiger, i’m surprised you haven’t been a regular guest on adam levine’s show. i suspect you’ve probably spoken directly with antoine antonopolous once or twice. and if i recall you’ve discussed Bcoin with Mkeiser on his show correct?
answer me this. why is teh counterculture narraative of bitcoin even important? what if bitcoin is valuable precisely because it is not some tool of liberty but just one more effective tool of techno-statopian digital assimilation. and what if bitcoin goes up another 10x because of the counterculture narrative dies and you can start buying stox from nyse directly with Bcoin?
is that bad? how will you square that with the narrative of Liberty KoinKreig? thoughts to stew on?
This is an easy problem to solve. Do a pre-ico on a centralized website. Set a 3 minute window for a person to get through a Captcha and then claim a token that will be used to claim a share of the ico. Then, that token is redeemed anytime on day one for a max amount of coins. For example, the ico was 10000 coins and 100 tokens were claimed on the pre ico, each token holder would have the option to buy up to 100 coins. On day two, the remaining coins would be divided up to the token holders… repeat until the ico coins are sold out. This won’t ever happen because people like to game the icos.