Not bad. not bad at all. I like you argument that anonymity is actually a strenght when it comes to whales. I would point out this is only the case if the whales do not know each other and not that the rest of the community do not know who the whales are. I think I have seen screenshots of a meetup that was arranged after the initial distribution and if these whales all know each other while we dont that is a strenght for them to make coordinated efforts (if they wanted.) But in prinicple I agree with you if they do not know each other it is a strenght.
Some other things I ponder on is your argument that there is no meaningfull reasons to control the economy, however this only considers the current situation and the debate was more on priniciple and on the future potential situation of ADA.
Finally the focus on 51% dishonest attacks only I feel is looking at the problem only from a technical and mathematical perspective when there can easily be political and social reasons that can cause even a 20-30% control of votes to have a major impact on what projects are implemented. For example it could cause a majority of projects to be launched in Japan because they can easily gain a majority vote while other countries suggested cannot agree among themselves (assuming voters where voting for country specific benefits). Now in general I would say these things are very unlikely to become a problem but perhaps there should be some clear governance rules on what you vote on so we can avoid some of these more politcal problems. And to do that you need to have clear defined values of what ADA wants to achieve.
With that said, I think you summarized many valid points and I thank you for the discussion and effort.
Yeah that’s correct – and that’s the risk of the trade off they made when doing the voucher sale in the same area. Hopefully it will pay off.
You’re right, I think the example I gave on this point was confusing. The point I wanted to make was having a lot of money doesn’t let you “control” the economy. It lets you buy stuff. Every time you buy things you have less money. Maybe I’m thick but I can’t imagine what “control” ADA whales have over “the ADA economy”.
I don’t even think it’s right to talk about “the ADA economy”. Economies are not based on currencies. Zimbabwe uses USD but is not part of the US economy. Economies are based around geographical regions. You can have virtual economies for virtual spaces, like World of Warcraft but ADA doesn’t fit this category.
Yeah this is what I tried to cover briefly in the “greedy narrow minded whales” section. Like you say this being a major issue is unlikely. What’s going to happen is IOHK is going to stay in control of the project for the foreseeable future and Charles is going to continue to build his vision. I find it hard to believe that the whales are going to want to go in some other direction.
Dear @LLFourn, I’ve read your thoughtful article, which I appreciate. However, you’ve misunderstood and over-simplified a few of my points and made a few inaccurate assumptions. I know you’re intentions are good so this isn’t intended to ignite any major debates; plus, I don’t have a lot of time for debate anymore because it’s clear the team has no interest in engaging the community on this issue, but a few comments are warranted.
From your article:
There are no paradoxes in life. What humans perceive as a paradox is actually just a collision with our own ignorance. In this case, there is no contradiction if you truly understand my point: A system can be intended to be trust-less, but a flaw in the system’s implementation can thwart its actual trustworthiness. More specifically:
The technical integrity and trustworthiness of a blockchain is undermined when the 50%+1 attack risk exists (and it does in this case).
The integrity and trustworthiness of a crypto market and corresponding economy is undermined when the concentration of crypto wealth gives whales enough power to manipulate the market (as proven below).
The integrity and trustworthiness of a blockchain’s political governance (i.e., technical development decisions, project voting, PR strategies, minting rewards algorithms, allocation of scarce team resources, crisis management strategies, regulatory and government relations strategies. . . . ) is undermined when a non-trivial portion of the community has reasonable doubts about the long-term viability of the project and/or the integrity of its crypto market due to the preceding two vulnerabilities.
Thus, on every meaningful level–technical, market, and political–a high concentration of wealth in any economic/market system completely undermines the integrity of that system. In response to these points, there are two general good-faith responses:
“We trust the team and whales; so don’t worry, be happy and enjoy the ride.”
“We love the team, but the high ADA concentration has many unintended long-term consequences that represent real risks to the viability of our project and community; therefore, we should take these concerns seriously and do everything possible to resolve these problems ASAP.”
The people who take your position have chosen the first option. I’ve lived long enough to know that option just kicks the can down the road. So, I choose the second option.
Yes, it certainly does. Have you ever worked on Wall Street? In Canary Wharf in London? Have you ever lived in the U.A.E., Saudi Arabia, Mexico, Russia, DRC, or any country in which the financial system is blatantly dominated and controlled by whales? Did you see how less than 10 people who substantially controlled over 70% of all the wealth within the American economy were able to dictate to over 300 million Americans that their taxes would be used to bailout the banks in 2008? How did they get that power and leverage over the entire ecosystem? They controlled the wealth because they controlled the laws that govern the way the system works; that’s the nexus of politics and economics. Controlling the flow of capital within a consortium of banks and/or as a consortium of whales certainly does give you the power to control an entire economy.
In fact, in this case we already see the whales manipulating the ADA market quite frequently with their sell- and buy-walls.
Bear Raid Attacks. When whales have the power to deliberately or inadvertently distort markets (See also this BTC whale caught on video.), unsuspecting crypto holders have no idea why the value of their crypto holdings suddenly collapses. During these market collapses, whales profit from their sell orders; then they can gobble up even more currency after they cause the market price to plunge. Then, that creates a buy-wall, which pushes the price back up rapidly, giving them an opportunity to pump the price up until they’re ready to dump another huge load of crypto into the market. In securities trading, this illegal strategy is called a “Bear Market Raid.” Regardless of its legality, this strategy is only possible when a market is dominated by a relatively small number of whales. And a small number of whales can only dominate a market when the distribution is highly concentrated.
These are market failures, not the mechanics of a free market. Market failures are fundamentally spawned by dysfunctional monetary and regulatory policies. In crypto markets, these market failures are the direct result of extremely high concentrations of crypto wealth in the hands of a few, which is the direct result of poorly executed ICOs and monetary policies.
The people who have debated against my position on this issue have ignored many aspects of economics and politics in the real world, including the past decade of crypto politics in the real world. I’ve already written extensively in many threads about these dynamics so I’m not going to repeat them anymore.
Of course, I never said “greedy narrow minded whales” anywhere, nor did I ever even insinuate that. My position has always been based on a capital structure argument, not a moral or personal attack against the whales. It’s nearly impossible to have a rational, good-faith debate when people make so many false assumptions about my position. Even somebody as sincere and thoughtful as you can’t resist twisting my words. This is why I stopped engaging most of the people who were debating me.
There were probably a dozen other comments in your article that misrepresented my position and/or over-simplified my statements and/or were technically inaccurate from a formal economics perspective, but my intention is not to get sucked into any more debates; so, I’m moving on.
Bottom Line: Some people prefer to hope for the best and not worry about problems until they arise. They may also be exhausted from debating or they might prefer to avoid controversial debates to avoid impacting the value of their ADA holdings. I can understand all those things, but these problems won’t go away. So, rather than waste time debating people who don’t want to see the problems, it’s more productive to spend my time working on projects to help reduce the impact of these problems. Over time I may share more about these projects, but in the meantime, I wish you the best.
(Again, I really did appreciate your thoughtful article, even though it misrepresented many of my statements.)
I have to reject the accusation of “twisting” and “oversimplifying” your words. I quoted them in full and linked to your post. Everything else was my thoughtful criticism of them. The “greedy narrow minded whales” wasn’t me putting words in your mouth. It was the name I gave to the worst case scenario where whales don’t support the goals of the project.
Obviously I didn’t really understand your position. I was hoping you or someone would respond with more detail, which you have so thanks! . I understand that these kinds of arguments are exhausting you and won’t hold it against you if you don’t respond.
Yes. The risk exists in all cases. We don’t currently know how much the current distribution of ADA increases this risk. It’s plausible that the ICO could have done differently to have a more geographically diverse set of holders to reduce the risk. As I said in the article it’s a trade off.
Manipulating the ETH/ADA, BTC/ADA doesn’t change the trustworthiness of the system. The Hunt brothers cornered the silver market. That didn’t change the properties of silver. It’s still an element on the periodic table.
Crypto market manipulation definitely goes on. If the whales successfully pull off some manipulation scheme the only people losing are the speculators that fell for their trick. I don’t really see what the big deal is.
More importantly ETH or BTC whales can manipulate the ADA crosses on Binance just as much as ADA whales. Do they undermine the “integrity” and “trustworthiness” of the ADA economy too?
Anyone who has doubts can just sell it.
All of your examples are where people use political power power to benefit themselves financially. The house of Saud didn’t get control of Saudi because it was a “riyal” whale – they created the currency after they came to power. There’s no one you can bribe with ADA to give you political power on the Cardano settlement layer. It’s just a distributed ledger. It doesn’t have any political power. ADA has a governence system, not a government.
Where’s the “failure”? People who are using the existence of buy and sell walls to determine if they are going to buy and sell are speculators by definition. Someone who gets tricked by walls should just stop. Anyone who wants to buy ADA can buy it and anyone who wants to sell can sell it. I don’t see any failures.
Of course it does. The entire reason most of us in this forum don’t trust the Federal Reserve System–and by extension, the U.S. monetary system–is because it is a source of concentrated power that has a history of manipulating the value of the USD through its so-called open market operations. Just because there is a “market” doesn’t mean it’s a functional or sustainable market.
You cited an example of a silver market scam that was only thwarted because the COMEX changed the position accumulation rules at the last minute to prevent the Hunt Brothers from getting away with their scam. That was a centralized exchange imposing an arbitrary rule while a scheme was being perpetrated, which happened to stop the Hunt Brothers at virtually the last minute, but many people lost huge amounts of money along the way as their positions were destroyed by the wild volatility caused by the Hunt Brothers’ market manipulation.
More importantly, there are at least a dozen other famous examples where the scammers have gotten away with market manipulation, including JP Morgan (the man) in 1901 and 1906/7, JD Rockefeller with his cornering of the oil market and manipulation of the stock market, Averell Harriman and his predecessor Cornelius Vanderbelt cornering the railroad markets via various stock market schemes, the Barclays LIBOR scam, among many others.
Market manipulation, market monopolies, fraud, and many other counterproductive affects attributed to insiders/whales having destructive power over markets never change the properties of any currency. But that doesn’t mean those counterproductive activities can’t cause markets and ecosystems to collapse, causing innocent victims to lose billions (or trillions in 2008) of USD. So, I’m not sure what the properties of any currency have to do with my point.
I understand you don’t think any of these issues are a big deal, but that’s your faith in a trusted system, not the properties of a truly trust-less system.
Sorry, but this doesn’t make any sense at all. Economic history is full of all kinds of people who have suffered losses from major market manipulation and it was not only because they were speculators.
Anyone who says this is over-simplifying. Some people have significant investments in Cardano-based projects, not merely in ADA positions. I still think Cardano is the best blockchain tech, but it’s monetary policy is less than ideal. I’m not trying to change it anymore because it’s clear the team is not going to change the status quo, but that does not mean the problem magically goes away. It just means we have to deal with the consequences as they unfold over time.
Yes, because that’s how the convergence of economic/political power always works. But you’re missing my point again. All your rebuttals are rooted in a fundamental concept: You trust the system. That’s fine, I do too, right now, but that’s the problem: We’re forced to trust it and we will always be forced to trust it even after IOHK has gone because the ADA concentration will never be truly diffuse enough to achieve a trust-less ADA economy for many reasons. So, again, I understand you trust the system, but that defeats the purpose of building a trust-less system.
You’re smart enough to envision how Cardano could potentially become more than just a cryptocurrency with a governance system; so, I think you know this is an over-simplified perception of Cardano’s future potential. Specifically, it’s a short step from a global cryptocurrency with a governance system . . . to several types of governmental organizations based on that global cryptocurrency. You can argue we’re far from that point, but the point is that point will never come if people already don’t trust in the inherent trust-less properties of the currency itself. So, it becomes a chicken-and-egg scenario that would not have existed with a more diffuse genesis distribution.
Again, I’m done trying to persuade the team to fix the concentration problem; I’m just trying to emphasize that your faith in a system is not the same as a trust-less system.
By definition, a “market failure” occurs in any situation in which the distribution/allocation of some resource is inefficient, often leading to a net loss to unsuspecting stakeholders. Buy/sell walls, bear raids, pump-and-dump schemes, market monopolies, cartels, and many other types of market manipulation (which are only possible when markets are highly concentrated) are market failures.
Bottom Line: I understand you have faith in the system, but that’s not the same as building a trust-less system. Thanks again for your comments.
@Adafans_io I’ve already answered this (and virtually identical) questions to you multiple times in other posts and even in the post above. So, you’re trolling again.
For all the people who think your reply was logical:
The same forcing principle exists in computer operating systems: There are dozens of desktop operating systems, so why does literally 97% of humanity use only Windows or MacOS? Because they are functionally “forced” to use them due to a lack of choice in the market place. Nobody can rationally sell their computer and use a new operating system outside of those two choices to comply with your logic.
And within those options, 83% of humanity uses Windows. This is not because Windows is necessarily the best; it’s because it has the most market dominance and it’s good enough. When something is not necessarily the best AND large numbers of people are functionally forced to use it, then don’t be surprised if they complain about its short-comings. The same principle applies to search engines, cryptocurrencies, and all other markets where there are de facto monopolies that functionally force users into a tiny box of choices.
That’s the situation with Cardano. It is likely the best crypto from a software architectural perspective, but it’s less than ideal from a monetary policy perspective. This forces me and other professional blockchain devs and companies to use Cardano for business purposes, while simultaneously disappointing us from a long-term monetary policy and humanitarian perspective. So, don’t be surprised if professionals complain about its short-comings while simultaneously acknowledging its strengths.
And like I said several times above and in other posts to you @Adafans_io: I’m no longer trying to persuade the team to fix the ADA concentration issue because it’s clear they are focused on other priorities and the status quo is good enough for them. So, you don’t have to troll any of my posts anymore with repetitious comments.
ok, for traders or generally people who can easily change monetary values without interfering any of their real life requirements.
But what when someone wants to build his business on top of that platform or intendeds connecting his existing processes to this new digital alternative?
I don’t say whales, hedge-fond managers, investors … are generally bad. But I would prefer some clear rules who prevent this lambo guy to f**k the system:
What’s your answer then: simply don’t park there anymore?
Hehe… Just as almost everything in this thread, you have everything completely backwards… and Its not just you, it is most people in both camps - and I will substantiate that claim when the time is right in the other thread… I am working on it… but I am just very busy in the moment… There is a lot of great things I want to jump in on here, but yeah I cant do it for now, so I have to keep it to this little statement…
Something worth a view, if you dont want to digg into doing the research yourself.
I am not a follower of truthnevertold - he is in the conspiracy camp, with many things I do not agree with… But his Video on the Hunt brothers is good.
The real scam here was not the Hunt brothers but the Comex and goverment intervention into this matter, THAT was the scam. Somehow the masses always takes history and events, and end up with the wrong and often even complete opposite conclusion of the truth… again, again, and again, with almost everything…
Someone buying masses amount of silver, price goes up, comex comes in to save the day, bunks go bankrupt… Evil rich guys (speculators) and a good government savior… That is the story that is easily understood by the masses, and that is why that became the story, the common knowledge…
There are very few people in this world and in this age, who understand money and how the markets work, specially in complicated strutures - this is probably one of the most misunderstood and least developed part of humanity. Which is why pretty much most conclusions of events that derive from the markets, are wrong. The reason for this is simple, how it works is counter-intuitive and that makes it very hard for most to comprehend on top of that there are socially, politically, and economical incentives to disregard truth and facts. The average person knows more about space, than they do about money.
Of course, we all know that. Approximately 2% of humanity uses various flavors of desktop Linux because the other 98% are functionally forced to use Windows or MacOS. That’s not the inevitable consequence of a free market; it’s the inevitable consequence of the thoroughly dysfunctional intellectual property (patents) regime in the U.S. today. So, the desktop software market is a failed market according to the technical definition of “market failure.”
These market failures exist because American capitalism is constantly corrupted by the collusion between government (the intellectual property system in this case) and corporate whales. The same thing happens when institutional governance and currency issuance are commingled and market/financial power becomes too concentrated.
Somehow, many people are brainwashed to think this is how capitalism should work, but it’s not the way Adam Smith believed capitalism should work; and it’s obviously not working for over 5-6 billion humans on earth today.
Apart from everything else mentioned, can you accept that you got the hunt brothers and this story backwards or at least it is not as straight forward as you have put it? Not anything else… Just this…
Perhaps you dont want to do that, since you would need to do the extended research to actually verify the story yourself… I can understand that if you take that route… But at least put into question what you previously had as a belief… Apart from that, this could easily be argued without even without looking at intentions and market participants, and just purely from market mechanics which I prefer to do… As we do not need to argue historical facts or intentions of the people involved.
If we can accept the general summary and conclusion put forward by truthnevertold and his videos (Which I do, because it is a case that I am familiar with, while everything is not included and some parts are left out, many of the important aspects are)
Then If you bring up the hunt brothers as a example of evil manipulation, those betting on cryptocurrencies vs fiat are just as evil. Speculating on crypto on the demise of FIAT… if crypto win/won, that will have tremendous effects on the established system, many ordinary people will lose everything in this process… there will be lots of pain… If the government now comes in to save the day, shutting down crypto, due to the pain of the transitioning (and the masses misidentifying it for bad) you will be the one labeled as a evil speculator causing all this pain and hurting the established system… Now we have an almost replica of the same situation… This situation is not unreal, it has happened many times before in history with gold.
I know It is not an exact replica, but it has many similarities, this was just squashed on a very early stage… But we have more examples with gold… Gold was banned for a long time, due to this exact nature, the evil speculators preferring gold over USD… and the same story has repeated itself many times throughout history in many countries over time… different cultures, isolated cases, different stories, but with the same predictable outcome.
The victors will define what story is told 40 years from now…
@jb455 From the videos: "The hunts sought to create a silver cartel similar to that of OPEC that would shake the debt-based establishment of Washington and Wall Street. . . " That’s the essence of both videos. There is no evidence whatsoever to support the idea that Bunker Hunt was trying to corner the silver market for the good of humanity. That’s nonsense. Bunker, Herbert and the Hunt tribe were trying to corner the silver market for their own benefit and they were angry because the Eastern establishment tribe that controls Wall Street and the Washington regulators was better at the market manipulation game than the Dallas tribe.
I am in NYC frequently. I see the manipulation frequently. I hate the manipulation regardless of whether it’s from the Eastern establishment or the good ol’ boys in Texas. Additionally, that video was produced by some random guy stringing a bunch of events together to tell a story that conforms with his ideology, but that doesn’t tell us anything about the true intentions of the Hunts.
On a personal note: I personally know Laura Hunt. She is the granddaughter of the patriarch, H.L. Hunt that started the entire Hunt Family fortune. In fact, I’ve met Bunker’s buddy David Koch and many other billionaire whales at many dinner parties over the years. The Koch Brothers essentially founded the entire modern libertarian movement with generous donations to the Cato Institute, Mises Institute, Heritage Foundation, AEI, CEI, and dozens of other think-tanks, professorships, endowments, etc. And they have manipulated every possible aspect of the U.S. political system to achieve their business and political goals, which are always conveniently commingled. (Everything is well-documented.)
I’ve also read all the modern libertarian luminaries, including Porter Stansberry, Peter Schiff, Jim Rogers, Mike Maloney, Gerald Celente, Doug Casey, Ron Paul, Jim Rickards, in addition to earlier generation thinkers, including Hayek, Mises, Rothbard, and others involved in the Mont Pelerin Society. So, I’ve read and heard every libertarian argument you can think of. I agree with most libertarian principles, but when it comes to specific solutions, I no longer agree with the standard libertarian mantra of “free markets are the cure” and “government, leave us alone!” in a world where A.I. is gobbling up the vast majority of human jobs and the wealth/power of private whales are now larger than the GDP of entire major countries.
To be clear, there’s nothing wrong with being a whale as long as you don’t try to manipulate markets and political systems. But it’s hard for humans to resist manipulating markets and politics when they have the power to do so. That’s why markets and political systems must be structured to resist the emergence of gigantic whales in the first place.
I’m not going to debate theory and ideology with anybody here anymore. Please just understand that I have a lot of real-world personal experience with large real-world whales and I don’t hate whales; I simply believe economies, markets, and political systems should be structurally engineered to strongly resist the emergence of gigantic whales. When they’re not structured to resist whale manipulation (even when their intentions are allegedly good), we get toxic plutocracies and oligarchies every time.
(And the alternative is NOT communism; so the nasty troll can keep her nasty ideological slurs to herself.)
it doesn’t matter if the hunt brothers were 100, or 100.000 people, the market impact was the same. The hunt brothers took out a small fraction of the silver market, buying it in the free market to protect their assets, and forward their principles and agenda to have backed money. Yes this benefits themselves, but so would the whole world from this… But this is even irrelevant… They have the Right to do this…
Buying silver in the free market to protect your assets, when gold is illegal, and that is the only option. The fact that you have a lot of money and could buy chunks of the annual supply does not equate cornering the market. This is a story that was created to misidentify the perpetrators here.
COMEX and The government was perpetrating the scam here. Comex couldn’t deliver on their promises and wanted to squash this… and the government has agenda to squash hard-money… Gold was illegal, they did not want silver to take golds place as the free markets choice of money…
But the point of this was to see if we can actually agree on anything, and it is clear we cant, you keep going back irrelevant incentives… If you are saying that what the Hunt Brothers did with buying silver (even if we dont put intentions into this) Then you betting on Crypto is the same thing - and that is really a shame. If you cant protect the right for the Hunt Brothers to act as they did, you cant protect the right of people betting on crypto…
Or if we people wanted silver, or gold… or anything else as money…
Because you do not act on some underlying principle, you just dish out judgement as you see fit?
Are you going to be this all-seeing-god and judgement of incentives to determine if their actions are criminal or legal? good or bad? or if their right to purchase in a voluntary transactions is valid?
People who bet on crypto arent doing it for the best of humanity, they are doing it primarily for themselves, and the second driver is for the good of humanity, but again for themselves, because they themselves have to live in this world. Their children has to live in this world, and their friends and family have to live in this world. The driver for the sole purpose of humanity, that would be very rare main driver, not that it can exist but for most its a combination of both, you can do both.
The term manipulation and speculator is used all the time by people who are on the wrong side of a trade, because it is an easy boogieman, since most people have a problem with self-responsibility. Even on this forum you have people coming and saying ADA is being manipulated because its dropping… Its absolutely crazy, I’ve been involved with markets for a long time, and I’ve seen it all, and I see everything repeating again, again and again… The same concept, but just a different story.
Had the situation been with 100.000 people doing the same as the hunts, with the exact same result, I bet you would have had a different opinion on it… if something is wrong by the individual it also has to be wrong by the collective and vice verca. The collective dont have special righs, they derive their rights from their individual rights. If you want to argue that when the collective does it, Its fine, you can do that… But then you are not arguing out from any consistent system, and one day, this tyranny will turn against you, and you will have no moral high-ground to argue against it because you have set the precedence… and you cant just be in favor of it, when it favors yourself… You dont just get to cry manipulation because it inconveniences yourself or the wrong people.
The American economy was not destroyed due to free market lol… America was build upon free markets, what is destroying it is government interference… I guess you are referring to 2008… and if you think 2008 was a free market crisis then you are simply wrong… The 2008 crisis and the following crisis that has yet to come which will be much bigger… Would never have formed in a free market…
Anyone who thinks 2008 was caused by capitalism and greed, are looking at the surface symptoms but not at the underlying cause… Wall street was drunk, but who liquored them up?
Why was the market acting irrational?
If you follow that path it leads straight to socialism and government interference, skewing up and screwing what would be else have been working market mechanics. The government and politicians benefited from pumping up bubbles, as it makes the economy look good on paper, but of course they wont be willing to accept responsibility when the tab comes, and the blame becomes something else, and the answer is more government and the masses gubble it all up. Its not even that the different parties are inherently evil or even understand whats going on, its just a natural process.
That is why when you install a government, unless it strictly restricted with what it can do, and that also means you have to accept it cant do everything… Once you unleash and open pandoras box of government solutions it will keep growing until it consumes and destroys itself. This is a fact, we have no situation where this hasn’t happened.
Government once put in place grows always, year by year and can be proven, it a inelastic phenomenon… the same phenomenon repeats over and over… in every country and all stages of history… some just have a slower process than others… and it will keep going, until it collapses, as a parasite that kills its host.
and that is the war between voluntarism and force
Does that mean that bubbles and misallocations never form in free markets? no, but they never reach systemic risk size, and apart from that, people who are not directly involved are unlikely to be hurt. What government has done is pack up all the market cycles, and instead of experiencing pain once in a while, we will now experience pain on huge scales… They have all been packaged up, and will unravel when the whole system collapses under itself - because no one, can beat the market, even the power of the government, the market always win.
They will claim they have saved us, and they will be right, until it all collapses… That when you actually see the result of the beast that has been created.
There is no way to trick it, there is no way to paper anything over, you can do this short term, but the forces of the market will always prevail eventually and reality will kick in.