Bitcoins/Litecoins/Virtual Currencies

James said:

The "premine" bullshit shows that he did almost 0 research or any specific analysis as to if it was a security or not at the time.

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He explained exactly how it worked. I don't really understand why you're so adamant that it didn't happen. A large chunk of ETH was sold for BTC before Ethereum launched. i've read it was ~72 million ETH, but I've not dug in to confirm. Please correct this if you have that information. This ETH was not mined, it was created and sold. That is a premine. What is there to research? Your boy explains it first 20 seconds of this video "2000 ETH per BTC"



Even if he "did almost 0 research or any specific analysis" it doesn't matter because he is chairman of the SEC and his opinion is more relevant than either of ours.

I think every investor should make their own determination as to how safe a coin is. We're all adults here and can judge risk for ourselves. I just don't think many people are appropriately assessing the landscape around shitcoins. Maybe they are taking enough precautions to protect themselves. Bitcoin was built from the ground up to resist this sort of pressure, I highly doubt the majority of these coins are prepared for it. Most of this garbage is pump and dump schemes and they'll cut and run at the even just the allusion to regulators coming after them.

In my mind the real value in crypto is a movement away from centralized control of the monetary system. If your coin of choice doesn't contribute to that, or can't resist regulatory pressures, then its garbage. This is fine if you're chasing USD gains, but I believe that we're playing a very different game here and that approach will get you wrecked eventually. My 2c

Flobee said:

A large chunk of ETH was sold for BTC before Ethereum launched. i've read it was ~72 million ETH, but I've not dug in to confirm. Please correct this if you have that information. This ETH was not mined, it was created and sold. That is a premine. What is there to research? Your boy explains it first 20 seconds of this video "2000 ETH per BTC"

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I've already explained it a number of times here, but for whatever reason you just can't accept that you're only looking at a fraction of the picture when considering it a 72% "premine," it was a ~12% premine, and we've already gone over why that video shows the exact opposite of failing the Howey test. Yes, 12% of the ETH supply was premined and sold to Ethereum Foundation insiders, but everyone was on equal footing for the ICO of the other ~70 million tokens, and a specific BTC payment was made to a BTC wallet address for a specific ETH amount, which is literally the exact same thing as setting the mining difficulty to easy as fuck and issuing an ETH block reward. Further, he then goes on to specify how the ETH token is a product and specifically not a security, it's a token used to power dApps on the network and they make no claims of future value or utility beyond that. I don't know what you're having trouble with here, bookmark this reply the next time you even think about coming close to this subject imo because this shit is FUCKING RETARDED.

Flobee said:

In my mind the real value in crypto is a movement away from centralized control of the monetary system. If your coin of choice doesn't contribute to that, or can't resist regulatory pressures, then its garbage.

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Every meme shitcoin I've bought is completely immune to whatever regulatory pressure you think will crush cryptocurrency, that's for sure.

James said:

I've already explained it a number of times here, but for whatever reason you just can't accept that you're only looking at a fraction of the picture when considering it a 72% "premine," it was a ~12% premine, and we've already gone over why that video shows the exact opposite of failing the Howey test. Yes, 12% of the ETH supply was premined and sold to Ethereum Foundation insiders, but everyone was on equal footing for the ICO of the other ~70 million tokens, and a specific BTC payment was made to a BTC wallet address for a specific ETH amount, which is literally the exact same thing as setting the mining difficulty to easy as fuck and issuing an ETH block reward. Further, he then goes on to specify how the ETH token is a product and specifically not a security, it's a token used to power dApps on the network and they make no claims of future value or utility beyond that. I don't know what you're having trouble with here, bookmark this reply the next time you even think about coming close to this subject imo because this shit is FUCKING RETARDED.

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So... it WAS a premine, but you're ok with how it was run. Premine meaning that the 12% given to insiders + 70m sold were not mined via PoW. That is not the same as:

The "premine" bullshit shows that he did almost 0 research or any specific analysis as to if it was a security or not at the time.

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I appreciate the numbers. According to Vitalik last year, ETH supply is ~112 million so yea... the premine is around 70% of the the existing supply. I genuinely don't see why you think I'm wrong. You're cool with the premine, I get it. I'm no expert of the legality of securities and I don't have a strong opinion one way or another. I will say that Vitalik saying its not a security... doesn't mean its not a security.

Flobee said:

So... it WAS a premine, but you're ok with how it was run.

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No shithead, the point is that what you consider a "premine" was literally technically indistinguishable from actual PoW mining meaning yes the 70m sold were mined via PoW. I don't know what you don't understand about that, I've said it now at least three different times. At least!

James said:

No shithead, the point is that what you consider a "premine" was literally technically indistinguishable from actual PoW mining meaning yes the 70m sold were mined via PoW. I don't know what you don't understand about that, I've said it now at least three different times. At least!

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Also... the 35k BTC they got in exchange for that "PoW mining"... probably nothing though. I mean if you don't think BTC is valuable... I doubt they do either. Probably sold it all for ~1.5 billion in furry porn NFTs

Flobee said:

Also... the 35k BTC they got in exchange for that "PoW mining"... probably nothing though. I mean if you don't think BTC is valuable...

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So you think the only people that should be paid for the act of mining are the electric companies and hardware vendors? I don't, because I'm not an idiot.

James said:

So you think the only people that should be paid for the act of mining are the electric companies and hardware vendors? I don't, because I'm not an idiot.

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What? No I'm just saying them creating the coins out of thin air and selling them for BTC is not the same as mining them via PoW. Using electricity to hash and secure the network is very different than paying Vitalik for his coins that he created. Its worth noting that BTC didn't start with ASICs and was intended for anyone to be able to mine from their PCs. That is not:

technically indistinguishable from actual PoW mining

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It's amazing how my political allies have changed so much in recent years. To the point that I hate Elizabeth Warren for the fraud that she is and am grateful for Ted Cruz here is not something I would have expected not long ago.

Something can be 'security-like' without being one or not one. Crypto in general doesn't fit any traditional mold very well. This is why applying 100 year old regulation to it makes fuck-all sense and makes figuring out taxes a nightmare. America just doesn't like to figure out new ways of doing things and instead likes to stick to tradition to the point of irrationality, and that is why America is losing economically.

Crypto is far too new to be regulated. Regulations are for things that have been around awhile and we understand how they should work. These idiot lawmakers think crypto is just 'libertarian money' or whatever stupid notion and they have no clue that it's so much more. Understanding crypto takes hundreds of hours before you really grok it. They don't care to learn and are eager to take away liberties on a whim.

Why can't the government in freedomland just warn its citizens of scams and risks without taking away freedoms to partake in harmless activities? It's always ban this, ban that with them. I see a lot of China parroting, but Americans should be more concerned about the freedoms they themselves are losing.

Flobee said:

Using electricity to hash and secure the network is very different than paying Vitalik for his coins that he created.

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You're paying Vitalik for the correct hash to receive a block reward, rather than paying the electricity company and CPU/GPU manufacturer to calculate it for you. I don't know what you're not getting here, these are no more "Vitalik's coins" than BTC are "Nakamoto's coins" and it's a stupid fucking suggestion.

James said:

these are no more "Vitalik's coins" than BTC are "Nakamoto's coins" and it's a stupid fucking suggestion.

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I don't pay Satoshi in this scenario you do pay Vitalik. These scenarios create different incentives. I'm not sure what you aren't understanding. We're arguing semantics are this point but I don't know how to make this any more clear for you.

God fucking dammit Flobee you are so fucking stupid about this shit. What do you think is going to happen here, that Vitalik is going to pull off the most epic rug pull in human history? The US government will somehow shut down a distributed ledger? NOPE THERE WAS A PREMINE CAUSE ETH IS A SCAM NOPE NOPE NOPE fuck me running, give it the fuck up, no one wants to hear it. I'll tell you what, if Ethereum crashes and burns I'll get FLOBEE WAS RIGHT tattooed on my right nutsack - there's a shitload of real estate there, so if you want me to put that above the entire text of The Raven let me know.

James said:

God fucking dammit Flobee you are so fucking stupid about this shit. What do you think is going to happen here, that Vitalik is going to pull off the most epic rug pull in human history? The US government will somehow shut down a distributed ledger?

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I wrote a big blurb going in depth about what I think may happen with Ethereum... but honestly I just don't want to argue about it. I'll just sum it up with this;

I believe that crypto exists because the world needs a new reserve currency that isn't controlled by any centralized entity.
I believe Ethereum made a number of compromises in decentralization in order to perform the functions it can at layer 1.
I believe that these compromises make it unfit to be the world reserve currency as it would be open to regulatory capture.

Ethereum will make you a ton of money, and maybe it's not a scam (I do think it is, but I hope I'm wrong) but its a completely different thing than Bitcoin. They're playing different games. Ethereum is pushing a ton of innovation and I think that is great.

I believe there is a world-wide power grab happening right now, and competition over the future monetary system is the root cause for it all. BTC was created specifically to be the best path forward for us IMO. An inflationary monetary system with centralized control created incentives that are responsible for the massive majority of the fucked up stuff in the world today. People act like cornered animals because their time-value is held in a currency that is constantly losing value. They have to run ever faster just to not fall further behind. The gap between asset holders and those that live fully on fiat gets bigger every year. Ethereum offers nothing to fix this in the long term, save for potentially just becoming a modern version of the same damn thing. If you're not focused on the macro and political ramifications of crypto then you won't see what I see.

You don't have to agree, but maybe that gives some perspective on where I'm coming from.

Your perspective is built on fallacies and misunderstandings and you will be left behind.

I mean, Eth was the textbook definition of a premine+ICO, and it was a large one, but that doesn't mean Ethereum isn't a real project doing revolutionary things. The founders+ICO buyers basically granted themselves a lot of ownership stake in the network at the expense of newcomers. People still choose to partake in the network knowing this. I think it's a bit shady and it's one of the reasons why I don't hold ETH. It's a good gig if you got in early, and if they keep doing revolutionary stuff before everybody else then they'll get away with it.

The recent switch to deflation is actually extra shady IMO because it means the early adopters will not only stop seeing their ownership stake dilute, it'll concentrate more. Eth's economics disproportionally reward the early adopters so much that it puts them in jeopardy of some new network coming along and eating their lunch. Since it's all open source, it'll be easy for a new network to clone Ethereum's advancements, and you already see networks like Binance's taking market share. If new developers end up on rival networks because they missed the ETH boat, then they'll start making stuff that Ethereum doesn't have, and that's the risk.

That is an extremely stupid analysis of Ethereum creation, wealth distribution and technical proficiency. I've walked through this uphill both ways in the snow about three thousand times now, whatever lens you are viewing the economics of Ethereum through is totally and completely wrong. I just sold a fucking jpeg for one and a half thousand dollars to the non-heavyweight champion of the world, suck on my fucking nuts Ethereum has made it.

I couldn't let Flobee have all the fun