Quote from: smooth on October 08, 2014, 03:57:52 AM

Quote from: TheFascistMind on October 08, 2014, 02:11:48 AM

But please allow me to point out an egregious flaw in your logic. Satoshi was mining when no one else was, so he got 100,000s of coins using only a few PCs to mine with. That is equivalent to a premine.

I don't consider it equivalent because when he was doing it Bitcoin was worth exactly zero, and its immediate prospects for ever being worth anything were remote. It was huge gamble to even bother paying for the equivalent, setting it up (my recollection is that his setup was speculated to be more than a few PCs), keep it going, pay for electricity, etc.

That doesn't change the fact that he took a premine.

I understand your point is that BTC was not immediately exchangeable for value and there was no prior market indication that it would be in the future.

But any developer who doesn't believe in his project's value, wouldn't invest his life in his basement coding it in the first place.

The more salient issue is to fix Bitcoin's flaws requires more capital than Satoshi had, i.e. your project needs to be very refined early so you need to pay bounties to experts. A one man project isn't possible any more (Satoshi was one of two men on the project while he was premining). Thus the value of a premine is aligned with the increased requirements.

The danger of a premine is that it puts all the voting power for that capital in the hands of the founding developer (unless the private keys were given to a foundation). But I am of the very strong opinion that funding raised by consensus is groupthink! Most world changing open source projects were run by Benevolent Dictators. Perhaps Mozilla is a slight exception, but Chrome readily kicked its butt with innovation (Mozilla is catching up a bit lately).

All ye who want to wear J.E.W. titles and ~~"design"~~wreck a coin by committee, please go far away from anything I do as you can. Don't walk away, please run or never come in proximity in the first place.

Quote from: smooth on October 08, 2014, 03:57:52 AM

It is possible he "borrowed" resources from an academic lab or something, but still it took time to set it up. It literally took years before the coins could be monetized at all, even to buy pizzas.

Which gave him time to develop it as basically one man and premine it. Now we don't have that luxury. Launch a half-assed coin and it could DDoSed or otherwise attacked, etc..

Quote from: smooth on October 08, 2014, 03:57:52 AM

Today, the situation is different. Pretty much any coin can expect to be listed on some exchanges relatively quickly (some right from the start) and have a clearly established and monetizable value, making easy for a pump-and-dumper to make a few big announcements and cash out, with no real intention to use the money to develop the coin. In fact businesses exist that do this on an industrial scale. Thus the entire model is horribly tainted by the market for lemons problem.

One solution to that is down play the announcement, even try to hide the announcement as best you can. But then people will accuse you of mining your own coin during that period.

Bottom line is if you are creating something of great value and that is very clear with your white papers and technical acumen, and you keep your mouth shut otherwise, then there are astute members of BTT who know what time it is. And they deserve the big prize because they won't let a measily 1% premine get in the way of making a fortune.

Quote from: smooth on October 08, 2014, 03:57:52 AM

The other problem is that even with the above (or perhaps because of it), the amount you can cash out even with a premine is pretty small. Zoidberg said he is getting about 750 USD per month from his deferred premine, and that is after the price of BBR has been pumped. Before recent development it might have been 100 USD per month or something (not sure of the exact numbers).

He could have done a non-deferred premine instead. Assuming the liquidity to cash that out at current prices existed (which it doesn't), he could only raise about 27K USD that way. Hardly enough to fund a project. Even increasing his premine from 1% to 10% would only be 270K USD, with vastly greater liquidity issues, and still not really enough to soundly such fund a project.

Exactly. If your coin doesn't go big, then the premine isn't that big of scam any way. And if it does go big, then it wasn't scam.

One can argue that a premine motivates the developer to pump it up, then cash out and run away. But this can clearly be ascertained by studying the project. It is quite clear which developers are dead serious about changing the world and who won't sell most of their coins until they are worth $10,000+.

Quote from: smooth on October 08, 2014, 03:57:52 AM

So as far as I can tell premines are a magnet for pump-and-dump scams and don't work very well for funding legitimate projects anyway. A better approach is needed.

Funding by consensus is utter shit in my opinion.

There is nothing wrong with a premine, it is only the intentions and qualities of the founding developer that make the difference.

Without a premine, only a rich developer can buy and mine his own coins. So only rich people should create coins?