Hey all, Vitalik Buterin, founder here.
Second, and more importantly, while I do understand the sentiment that cryptocurrency algorithms should be neutral and privilege no specific parties I would like to contest the claim that the concept of neutrality in the context of issuance is both (1) possible and (2) desirable. When you're putting BTC into the Ethereum fundraiser, you're financially empowering and incentivizing an organization that has produced
substantial real results already, and is pledged to developing the Ethereum protocol. When you're putting BTC into a proof of burn, through the deflation effect you're effectively donating your money to large BTC early adopters.
It is true that the side-effect of ProofofBurn is to increase the value of BTC, but on the scale on which ProofofBurn occurs the change in BTC value is nearly marginal: for example 1000-10000 bitcoins out of 12,000,000+ in circulation represents a .000083% - .00083% increase in value per coin. I think rather the point behind it is as a barrier from easy entry, and while it is true that someone may burn a very large sum, unlike with fund-raisers there is no guarantee on the return of that money and thus generally serves as a barrier from monopolistic capitalization.
With regard to the "founders get some for free" factor, what people need to understand is that every currency, including BTC, QRK, MSC and Ripple, so far has privileged its founders in some fashion. The only difference is that in some cases the privilege is more subtle than in others. With Bitcoin, Satoshi got his 0.25X by mining it for a year when nobody else had heard about Bitcoin yet. With MSC, JR got his by running a fundraiser relatively quietly on Bitcointalk and then targeting media attention only after it was over. We are not seeking any avantage through obscurity; we will be targeting the limelight from before the first day that the fundraiser launches.
The comparison to Satoshi is unfair, since the obscurity was at least mostly unintentional and though he may have held certain notions as to the Bitcoins future value, there was no real way to know that there would be such value (main-stream adaptation) to Bitcoin and not some other protocol.
Now, to clarify some facts:
* The founders will not be getting any BTC from the pool. We may get some not particularly high wages to live on, but our financial interest in the project is heavily concentrated in the value of our premine share.
* The founders are not getting 25%. The founders are getting 12.5% after one year when those funds actually become accessible, and the percentage will rapidly dwindle due to supply expansion, becoming 6.25% after 5 years. I'm sure that there exist five people today who together own 6.25% of all bitcoins, and Satoshi alone likely has that much. In Mastercoin,
three people have 25%.
According to the numbers specified on your website - founders get .25x of x fundraised funds, and the foundation gets .25x of fundraised funds. Which would make the premine supply 1.5X and thus gives .5xXor 33% premine to the founders - plus the equivalent of all fund raised funds in btc.
Suppose the developers participate in the fund raiser, they donate some P % of X total btc. They therefore get P + .5P in funds, and all of their BTC back from the foundation. It makes exploitation very clearly possible.
And since 33% of initial premine + The entire amount of btc is already a such a sum that can only be explained as Greed - I don't see on what grounds you can convince anyone that you aren't going to exploit the system further.
If ethereum came to even 10% of BTC market cap, just 2-4% should be more than plenty for all developmental and foundational purposes.