Crypto-world has been in downtrend for about couple weeks now. Uncertainty of the future of bitcoin has cause a lot of alt coins drop in the prices drastically. My main concerns are about STEEM and Sicoin, as I am invested in these coins. Until today I was convinced the main reason was the noise around the destiny of bitcoin, that didn't bother me much, because once dust settles things should go back bullish trend.
Today, as I was reading up more conversation about siacoin, I have come across something really disturbing. Siacoin developer suggesting a hard-fork to fun the development operations. Here are Taek42, siacoin developer's comment from reddit:
what would need to happen here realistically? How much value would bookchin provide to Sia as part of Nebulous?
We are planning on making 2 hires this summer, neither of them are bookchin, and I think they each are a better choice than bookchin. That said, I don't think bookchin would be a bad hire, he's just not #1 or #2. We're definitely pushing the limits of our budget at this point.
Out of curiosity, what is the current venture funding situation for Nebulous? Are you looking to raise more? Other than Siafund and later stage ASIC profits, how would a new VC investor recoup their investment?
We have considered continuously the best way to finance Nebulous. We thought Obelisk would be a good route. Moderate margins and high sales would have given us enough to expand the team comfortably, but that hasn't worked out so far.
We have thought about selling siafunds, though at this point we're not comfortable with the regualtory risk we'd be taking on. There's also the option of hardforking in like 1 billion or 2 billion siacoins, directly into our wallets, and then selling like 1 million a day to fund our operations. We could even construct the hardfork so that we only get 1 million per day for 3 years or something. This would give us enough to double or triple the size of our team, is a negligible amount of inflation, and then we could have a large operating budget.
That option I think also carries regulatory risk. I ~think most traders would actually like that though. The amount of development we could do with a move like that would surely outweigh the dilution to the currency. Maybe instead of 1 million per day we do 500k per day, or even 2 million per day. I have no idea how to make that decision fair though. Obviously if we give ourselves 1 billion coins per day, the dilution is going to be wayyyy higher than anything we do to make up for it, even with hundreds of devs. At at 100k coins per day, I think it's pretty obvious that those coins paying for development would be better than the dilution.
Again, all of this is just me thinking out loud. We overall are not likely at all to pursue either option due to regulatory risk. We don't want to be found guilty of securities fraud.
I think the siacoin dilution route is probably the most favorable from our perspective. It's also fair - everyone in the siacoin ecosystem essentially pays equally, in the form of diluted holdings.
I'm open to taking other suggestions.
Right now, our real plan is to keep using Siafunds. Right now they are paying out something like $500 per month. That's not enough to cover even one dev, but if we keep growing, it could be enough to pay for a single person, or even a small team by the end of the year. The final option I think would be to open a Patreon for the development team. The vue.js dev famously makes a full salary from patreon ( https://www.patreon.com/evanyou ), and we could do the same for Nebulous or something similar.
Read the original comment from 5 days ago here.
Now that explains the main reason why siacoin was rapidly going down in price.
Yesterday they have announced that they have received donation from INBlockchain in the amount of $400k. This made them abandon the idea of hard-forking siacoin to fund the development operations, at least for now.
Just the fact they considered this is mind-blowing. As brilliant of software engineers they are, they absolutely ignorant in the business and economics aspects of their operations. Hard-forking to fund their wallets at the expense of siacoin holders would be the end of siacoin. How can you in sane mind make such a move on technology you want to be decentralized. I think siacoin just dodged a bullet, they almost ruined such a brilliant concept of decentralized digital storage.
Although they have committed not to hard-fork now or in the future for the development funding purposes, I think some damage to the reputation has already been done. As soon as I recoup my investment I am dumping SC, maybe even earlier.
This is what happens when crypto-technology operates in centralized fashion. Few decided for their own benefit, with complete disregard of other stakeholders. Few take the profit at the expanse of rest of the stakeholders. That is what central banks do, that is what penny-stock companies do. Don't call it decentralized when you are completely centralized.
Good read man. Thanks for the article. You are right. I'm actually surprised how many of the coins with valuations of millions of dollars have hiring dev problems as well as not having enough business advise. As a whole they look like amateurs if they have these plans without deliberating with financial advisers and business professionals first.
Thanks for your comment. I will be observing what happens with them, but now I am thinking moving my sc to something else. Need to reevaluate my position.
I am not so sure financial advisers would change much, because they would wanna get paid to. They actually would be greedier.
Just the fact there already 24 billion siacoins in existsnce, I don't see it going any hogher than $1. With no cap in the future minable coins, that makes things even worse.
I totally agree. I guess it would not hurt to have like an economic adviser in their group so that they avoid mishaps like this in the future. Whew! It could have been a disaster if they proceeded to dillute the price of Siacoin. Steem had that problem as well when the inflation rate was too high crashing the price of Steem from $4 to measly 17 cents. Good thing that was avoided.
I really believed in the concept of siacoin, great potential to take over storage space. Now I am not so sure, I need to reevaluate my position. But the fact somebody donated almost half a million means there some strong hands interested in the success of the project.
Thank you for sharing this information.
I believe this is the part that you worry about:
"There's also the option of hardforking in like 1 billion or 2 billion siacoins, directly into our wallets, and then selling like 1 million a day to fund our operations".
Isn't the type of digital assets that we all love supposed to be open source with everyone having the option to hard fork it? If someone forks it and solves Siacoin's issues that prevent it from real life use, he could become very succesful. But hard forking to skim some coins. Well.....
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