I got FOMO fever reading your post… LOL. I think I will buy some TMT. The risk / reward at the current price seems very promising and I think this is the answer when evaluating ICOs.
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Quite simply that is an inherent risk of decentralization. You have to DYOR. The more decentralized something is, the greater the potential for innovation but also for scams. It is a trade off you either accept or you don’t.
The Onion Router ( TOR ) is a wonderful decentralized system that offers privacy and anonymity. Obviously that can be used for both good and bad things
" the equivalent of creating a very powerful weapon and handed it over to a bunch of kids and saying “here you go kiddos, don’t hurt yourselves”
Give me a break. A lot of new technologies are like this. CRISPR gene editing is a new technology with the potential to do both incredible and terrifying things. The technology is out there for everybody, including kids in their basement, to tinker with. Does that mean it should never have been invented ? Hell no !
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Ok good points. But like I said, my example was an extreme to show the nature of the problem. Any inputs on the characteristics of a quality coin? Or what does a scam coin look like?
Regulation scares away some of the riff raff, but there are always clowns at a party.
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The ppl should be responsible for their actions (required for developing respect of others and themselves), Nobody forces them to go accross the field. And a lot will do anyway (me either, but I won’t blame anybody if I step on one), even when the minefield has big red signs everywhere, as we have currently in crypto space: “MINEFIELD, STOP, DO NOT ENTER”. 
So, to blame the Natural Selection for the human stupidity is not fair. One of my favorite quotes is the following: Smarts learn from others’ mistakes, Dumbs won’t even learn from their.
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@_ilap I said I used the minefield as an extreme example to expose the nature of the problem and now people are wrapped around the axel.
But I have this to say to all the people who are in the no regulations camp @Upwardbound @RobJF @magnetar
Those of you who say this is an unregulated market and advocate the wild wild west philosophy; Who is the entity responsible for saying There will be only 100 staking pools ??? By defining that there can be only 100 pools is regulation. By defining the language, sematics and limits of a smart contract is regulation. By defining the interest rate you will earn by staking your Ada at 2.5 to 5% is regulation.… This is the same thing as saying the world can only have 100 banks, and the banks can only provide X% interest rate. We already have regulations that have been dictated.
So this big, powerful, terrible entity called regulators already exists and is already making rules. They can define what an honest node is, they can define what is honest use of the protocol, then why can’t they define when a smart contract becomes a hazard to the ecosystem, or is being used to scam people, or lacks a quality purpose and then that smart contract needs to be removed from the ecosystem (Cardano network)?
Another Edit: Another possibility - maybe a software engineer can write an application than runs on the Compute Layer and has a plugin to peoples Daedalus wallets that allows a third party evaluator or community vote to show which types of tokens, coins, or coupons are generally considered to be safe and which types are known scams.
Edit: I am not asking these question for a short term fix, I am asking these questions for long term, large scale adoption… the general public may not want to adopt a mine field.
The big difference here is that IOHK does not say there only gonna be 100 staking pools - they say: "anyone is free to participate and to create a pool, but we design the system in such a way that it will be monetary profitable for ~80% of all stake to go into 100 top pools." And, unfortunately, only community decides what “top” means in this case. And the system is still an open participation. The main point is to incentivise the stakeholders as a group to put money into at least 100 pools, and not into 3, or 2, or 1. They are drawing the bottom line, and not the top line.
I think there’s already a big incentive in not getting scammed. Whether it is possible or not to create an incentive to not scam others and keep the system to be an open participation would be out of my expertise at the moment. Personally I think it is much more important to have a system where people who are willing to manage their own affairs at risk are able to do so. And then gradually build layers of more safe and less decentralised frameworks over that system. If there’s a problem of increasing complexity of doing your own research - have an entity that will help a user to do it in exchange for some value. But: a) It doesn’t have to do anything with the underlying system itself; and b) You have to put trust in that entity. And everyone would be free to select any option they want.
But I think forcing the system itself to become less open in order for every other person to be able to use it is not rational, imo. I think it is pretty rational to understand that not everyone needs crypto-technology in their life. Many people would be much better off keeping their affairs managed by others at a cost. And I think such services can exist over a digital economy just as well as over the “real” one.
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Great points Ruslan. Still, creating the incentives (rules for success) is a form of regulation because the people creating the incentive are trying to control peoples behavior with a set of good behavior rules. I am suggesting a way to dis-incentivize scammers. Rules for bad behavior (not always just the opposite of rules for good behavior). I am hoping there is some middle ground between Ethereum governance (little to non-existant) and EOS governance that is pretty strict and can reverse a transaction based on a 15 of 21 vote. I think Ethereum and EOS sit on the two extremes of the model.
I am not looking for a solution now. Just a range of ideas that could be to be considered by voters of the future or Cardano developers to reduce scams or make the system a better place to operate. And I think that includes defining what good or quality tokens, coins, coupons etc… look like.
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Emurgo seems like one of those wizards behind the curtain quietly making magic things happen.
I appreciate you’re trying to be practical and reasonable, but I’m afraid I still don’t agree with this point. I think it should be up to the community to somehow vote on tokens/projects/whatever, with no pre-defined qualifications. Whether that should happen via the governance arrangements or some other mechanism I don’t know. But I’m sure that trying to work a priori, blind, is a bad idea.
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You make some great points Rob. I really do learn a lot from you. Some time I can be too assertive, but I do listen.
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But I have this to say to all the people who are in the no regulations camp @Upwardbound @RobJF @magnetar
Regulations are a framework. Professionally its in my blood so that is not an accurate statement in my view, and its not all or nothing. Less is more here.
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Ahh, the Charles gospel. Well, Charles giveth…and Charles can taketh away. He madeth, and he can taketh to new heights.
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Look at any well run blockchain similarly to a well run OS, like Windows. Many companies make antivirus software, but some make better products. How do you suggest a mature platform like Windows track and rate all exisitng products to see what started well, but now is “shit”. Also, every new product in every corner of the world has to be approved? Not gonna happen, bottleneck isnt even the word. Strangled?
That is the markets job. Same as in coins, an ad for it everywhere doesnt make it the best choice over another.
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Good points. Thanks!
Reading most answers about this topic makes me ask finally if Cryptos are intended to be perfect (with no drawbacks)?!
Because surely and IMO everything is called to have advantages and disavantages. Now the question is, are advantages stronger than disadvantages? What for me is Yes…
For what solutions against SCAMS let us ask ourselves what is a scam and what is a failed ICO? To me a failed ICO must have tools like those of DAICO to simply refund investors (what again leads us to ask another question : when can we pretend an ICO to have failed?). But definitely what for me makes an ICO a scam is the intention of those who run it. And another answer to solve that can then be the regulation…
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@rickymac You have raised good questions. These questions represent the “responsibility to the market” aspect of this platform. We know already how ubiquitious platforms that address the needs of users but ignore their responsibilities to the market end up. Examples, Facebook and Twitter.
According to the “What is Cardano?” page on cardano.org,
“A major innovation of Cardano is that it will balance the needs of users with those of regulators…”
ICOs are essentially securities until and unless the deliverable is a distributed and decentralized application. Therefore, all regulations that apply to raising funds from public should apply to ICOs as well, until they transform to commodities. After that, all regulations (read checks and balances) that apply to trading of commodities should apply.
Ethereum’s ERC20 token may be fine as a software protocol; however, the operational aspect (including answerability to investors) is completely missing.
I agree with what others have pointed about centralized entity or an oligopoly of entities. In centralization there is always the risk of bias in applying the rules no matter how good the rules are.
The rules must be open, applied uniformly, and must never require opinions of “experts” – decisions should be based on facts alone. But, off course, this is a big challenge.
I hope research in contract completeness (or incompleteness) finds application in this area. There is work underway according to this article…
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Except Ethereum has reversed transactions thus violating immutability. That is why ETC formed. So I would argue that the extremes are ETC and EOS.
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Did you mean ETH and EOS? ETH reversed transactions, not ETC 