In case you missed it, today Brave raised $36M for the Basic Attention Token. They had allocated 30 days for the token sale, but sold out of 1B BAT in 24 seconds.
The Basic Attention Token (BAT) ICO just raised 30 million dollars in 24 seconds. VC's didn't even have time to put on a sweater vest.
Clearly there is a lot of attention on this space right now - it's no secret that there's something going here. In this case, the reason the sale went so quickly is that there was a very small number of very large buyers -- as of right now, the top 100 holders of BAT own 98.8% of the float:
As cryptocurrencies and blockchains have continued to gain steam (and attract capital), a common question in the air is, what type of leader does it take to be successful in this space? A common variant on that question is: "will [leader] need a grownup in the room once they get ahold of all that money from the crowdsale?" If it's not already obvious, cryptocurrency development is open source development. The basic challenge in open source development is to get other technical people to adopt your technology, and to cultivate broad community support around it. The skills required are not just technical, but also political. Open source projects need to strike the right balance between direction, inclusivity, openness, commit rights & governance, etc -- you are not only hoping to get people to use your technology, but to volunteer their time to maintain it. Nice trick! If you look at some of the most successful open source projects, like Wordpress, Ruby on Rails, MongoDB, jQuery, just to name a few -- you'll see a common pattern of buttery technology paired with savvy political leadership. The big political risk in any open source project is
As more areas of our economy become computerized and move online, more and more of what regulators need to understand will be in the source code. For example, take the VW emissions scandal:
These days, cars are an order of magnitude more complex, making it easier for manufacturers to hide cheats among the 100 million lines of code that make up a modern, premium-class vehicle.In 2015, regulators realized that diesel Volkswagens and Audis were emitting several times the legal limit of nitrogen oxides (NOx) during real-world driving tests. But one problem regulators confronted was that they couldn’t point to specific code that allowed the cars to do this. They could prove the symptom (high emissions on the road), but they didn’t have concrete evidence of the cause (code that circumvented US and EU standards).
Part of the challenge here is not just the volume of code, but the way it's delivered: in the case of most consumer devices, code is compiled to binary, for competitive and copyright reasons. So, in the case of the VW scandal, researchers had to reverse-engineer the cheating, by looking at outputs and by studying firmware images. By contrast, with cryptocurrencies and blockchains, everything is open source, by definition. If you're curious about how the bitcoin, or ethereum, or tezos networks work, you can not only read the white papers, but you can examine the source code. Because the value of cryptocurrency networks is embedded in the token, there is no longer a commercial incentive to obscure the source code -- indeed, doing so would be detrimental to the value of the network, as no one would trust a system they can't introspect. This may seem like a minor detail now, but I suspect it will become an important differentiator over time, and we'll begin to see widespread commercial and regulatory expectations for open source code over time.
In case you missed it, today Brave raised $36M for the Basic Attention Token. They had allocated 30 days for the token sale, but sold out of 1B BAT in 24 seconds.
The Basic Attention Token (BAT) ICO just raised 30 million dollars in 24 seconds. VC's didn't even have time to put on a sweater vest.
Clearly there is a lot of attention on this space right now - it's no secret that there's something going here. In this case, the reason the sale went so quickly is that there was a very small number of very large buyers -- as of right now, the top 100 holders of BAT own 98.8% of the float:
As cryptocurrencies and blockchains have continued to gain steam (and attract capital), a common question in the air is, what type of leader does it take to be successful in this space? A common variant on that question is: "will [leader] need a grownup in the room once they get ahold of all that money from the crowdsale?" If it's not already obvious, cryptocurrency development is open source development. The basic challenge in open source development is to get other technical people to adopt your technology, and to cultivate broad community support around it. The skills required are not just technical, but also political. Open source projects need to strike the right balance between direction, inclusivity, openness, commit rights & governance, etc -- you are not only hoping to get people to use your technology, but to volunteer their time to maintain it. Nice trick! If you look at some of the most successful open source projects, like Wordpress, Ruby on Rails, MongoDB, jQuery, just to name a few -- you'll see a common pattern of buttery technology paired with savvy political leadership. The big political risk in any open source project is
As more areas of our economy become computerized and move online, more and more of what regulators need to understand will be in the source code. For example, take the VW emissions scandal:
These days, cars are an order of magnitude more complex, making it easier for manufacturers to hide cheats among the 100 million lines of code that make up a modern, premium-class vehicle.In 2015, regulators realized that diesel Volkswagens and Audis were emitting several times the legal limit of nitrogen oxides (NOx) during real-world driving tests. But one problem regulators confronted was that they couldn’t point to specific code that allowed the cars to do this. They could prove the symptom (high emissions on the road), but they didn’t have concrete evidence of the cause (code that circumvented US and EU standards).
Part of the challenge here is not just the volume of code, but the way it's delivered: in the case of most consumer devices, code is compiled to binary, for competitive and copyright reasons. So, in the case of the VW scandal, researchers had to reverse-engineer the cheating, by looking at outputs and by studying firmware images. By contrast, with cryptocurrencies and blockchains, everything is open source, by definition. If you're curious about how the bitcoin, or ethereum, or tezos networks work, you can not only read the white papers, but you can examine the source code. Because the value of cryptocurrency networks is embedded in the token, there is no longer a commercial incentive to obscure the source code -- indeed, doing so would be detrimental to the value of the network, as no one would trust a system they can't introspect. This may seem like a minor detail now, but I suspect it will become an important differentiator over time, and we'll begin to see widespread commercial and regulatory expectations for open source code over time.
The Slow Hunch by Nick Grossman
Investing @ USV. Student of cities and the internet.
The Slow Hunch by Nick Grossman
Investing @ USV. Student of cities and the internet.
Which raises the question, is this the right way to do things? In the idealized version of an open, public token sale, the idea would be to spread the ownership as much as possible -- since tokens are really meant to be about use rather than simply speculation. I suspect that we will see variations in the model that attempt to correct for this. Nick Tomaino suggests doing something akin to a private sale to large investors in advance of the public pre-sale:
best idea I've heard is from @ljxie: take indications from all, then raise a fixed amount giving % allocations based on those indications.
While this doesn't completely solve the problem, it does feel like an improvement over the BAT process -- where large investors can participate without crowding out smaller investors and individual users.
the fork
-- since the code is open, anyone can just take a copy and develop that in their own way, siphoning off attention and effort. So the main goal of the politics is to keep people onboard, rather than forking. But sometimes, even the savvy political leadership part may not be necessary.
"Some people think I'm nice and are shocked when they find out different... I'm not a nice person, and I don't care about you. I care about the technology and the kernel—that's what's important to me."
So in some cases, (as in with Linux and Git) the technology can be so good that it can survive even caustic leadership. The next question, then, is: but open source projects need a business model too, right? Wordpress needed Wordpress.com (the hosted service) to supply the business model; Ruby on Rails needed Basecamp (saas); MongoDB followed the Red Hat model of enterprise support (and now hosted services), and Linux has the Linux Foundation (corporate donors) -- in each case, you had to figure out a way to build a business on top of the open source foundation. Sometimes this works, but lots of of times it doesn't. What's different about today's crypto landscape is that the business model is built-in to the product, so there's no longer a need to bolt-on a business model. So maybe we don't need an adult in the room, at least not in the traditional sense of someone who knows how to "run a business" -- making corporate deals, showing up to meetings in a suit, etc. But, to add another twist: cryptocurrencies are like open source projects that are also central banks -- they are both a tech platform and a monetary platform. So, take all of the politics inherent in open source projects (risk of fork, etc) and lever that up with strong financial interests tied to technology decisions: now you have the cryptocurrency ecosystem. The two biggest examples from today are Bitcoin's continued struggle to deal with its scaling issues, and Ethereum's recent hard fork following the DAO hack. Bitcoin may be reaching consensus on scaling after several years, and it appears that Ethereum (under Vitalik's direction) has recovered incredibly well after the hard fork. Both of these have shown that you can build a multi-billion-dollar cryptocurrency platform with very little traditional business infrastructure, but that you will undoubtedly face not only the "regular" open source issues, but a new variant that is even more political and highly charged -- that's a tall order, but seems to be what's required.
Which raises the question, is this the right way to do things? In the idealized version of an open, public token sale, the idea would be to spread the ownership as much as possible -- since tokens are really meant to be about use rather than simply speculation. I suspect that we will see variations in the model that attempt to correct for this. Nick Tomaino suggests doing something akin to a private sale to large investors in advance of the public pre-sale:
best idea I've heard is from @ljxie: take indications from all, then raise a fixed amount giving % allocations based on those indications.
While this doesn't completely solve the problem, it does feel like an improvement over the BAT process -- where large investors can participate without crowding out smaller investors and individual users.
the fork
-- since the code is open, anyone can just take a copy and develop that in their own way, siphoning off attention and effort. So the main goal of the politics is to keep people onboard, rather than forking. But sometimes, even the savvy political leadership part may not be necessary.
"Some people think I'm nice and are shocked when they find out different... I'm not a nice person, and I don't care about you. I care about the technology and the kernel—that's what's important to me."
So in some cases, (as in with Linux and Git) the technology can be so good that it can survive even caustic leadership. The next question, then, is: but open source projects need a business model too, right? Wordpress needed Wordpress.com (the hosted service) to supply the business model; Ruby on Rails needed Basecamp (saas); MongoDB followed the Red Hat model of enterprise support (and now hosted services), and Linux has the Linux Foundation (corporate donors) -- in each case, you had to figure out a way to build a business on top of the open source foundation. Sometimes this works, but lots of of times it doesn't. What's different about today's crypto landscape is that the business model is built-in to the product, so there's no longer a need to bolt-on a business model. So maybe we don't need an adult in the room, at least not in the traditional sense of someone who knows how to "run a business" -- making corporate deals, showing up to meetings in a suit, etc. But, to add another twist: cryptocurrencies are like open source projects that are also central banks -- they are both a tech platform and a monetary platform. So, take all of the politics inherent in open source projects (risk of fork, etc) and lever that up with strong financial interests tied to technology decisions: now you have the cryptocurrency ecosystem. The two biggest examples from today are Bitcoin's continued struggle to deal with its scaling issues, and Ethereum's recent hard fork following the DAO hack. Bitcoin may be reaching consensus on scaling after several years, and it appears that Ethereum (under Vitalik's direction) has recovered incredibly well after the hard fork. Both of these have shown that you can build a multi-billion-dollar cryptocurrency platform with very little traditional business infrastructure, but that you will undoubtedly face not only the "regular" open source issues, but a new variant that is even more political and highly charged -- that's a tall order, but seems to be what's required.
