ETH Challenges & Bullish on Bitcoin Despite Drawbacks

Albert Wegner shared his view on the state of Bitcoin, Ethereum, and of course, ICOs, which he acknowledges are likely slowing down, at least for now:

So where are we today? At least temporarily there seems to be a slow down in ICOs. This could turn out to just be a lull before more activity resumes but it could also be a welcome return to more sanity (if the latter, there is likely going to be an over correction).

As most ICO tokens are built on top of Ethereum, he sees challenges ahead and believes progress needs to be made to scale Ethereum:

In either case Ethereum faces a strong headwind not only from this change in sentiment but also from relatively costly and slow on chain computation. The bull case for Ethereum is that sometime in 2018 we will see a couple of Ethereum based projects launch successfully and get broad adoption *AND* progress is made on Ethereum scaling (either directly or through projects such as Raiden or Plasma). The bear case is that at least one, or possibly both of these don’t happen.

And on Bitcoin, he is cautiously bullish and ok with Bitcoin’s “drawbacks”:

Oddly I think that Bitcoin continues to be misunderstood by many people in the cryptocurrency space who want it to be more than it has to be for it to succeed. It is one of those cases where the more you know, the more you are likely to overthink it. Yes, Bitcoin has all sorts of drawbacks as a blockchain, but it is the one cryptocurrency with a widely understood use case: censorship resistant store of wealth

3 Keys to Optimal Token Sales

Albert Wegner with thoughts on Optimal Token Sales:

Though he goes into much more detail, the basics are:

  1. Keep initial sale small.
  2. Hold one or more subsequent sales of increasing size
  3. When the protocol is ready, hold a final sale and/or distribution that gets all but a small fraction of the initially available tokens out for use.

Some of his ideas are quite similar to what Vitalik described previously (which he also cites). Before getting to the right way to hold a token sale, he lays out the two extremes in token sales with the right way somewhere in the middle:

The most potential for trouble are token sales which are one-time, large (possibly even uncapped) and take place when minimal specification / technical work has been done. In these the risk of outright abuse is highest (eg team starts paying themselves above market salaries, lavish perks), as well as the risk of nothing of use ever shipping is highest also

Conversely, the least problematic and the best incentives for the operation of a protocol would come from a highly distributed “helicopter drop” of a token that can immediately be used in a fully functioning protocol. The team makes no money here so there is zero potential for abuse, there is no technical risk (by assumption) and the recipients have a windfall so they will have no issue selling or using the token.