What is preventing whales from forming cartels to get the majority and than collectively manipulate the block chain in their favor?
In the reward phase, since ADA isn’t mineable and all ADA already “exists” where do rewards come from? Are the rewards awarded from some special entity in the network like treasury or IOHK / Cardano Foundation account or is the reward just collection of fees from processed transactions?
Since ADA is not mineable this has likely created many whales that bought a lot of it while it was cheap.
In my opinion, even though they deserve some privileges for kickstarting the whole process, they are a big threat for the whole system.
Since award process is not really random, but dependent on your stake they have a growth advantage. If such whale decides to cash out he can crush the prices on the market.
We can argue that they won’t cash out because of reward incentive, but since ADA is “Etherium of Japan” or what ever, and Japan is hosting Olympics in 2020 people might find it convenient to buy ADA to use in Japan (especially if debit card is realized by then).
At that point value will rise and it’s only the matter of time till one of the whales decides to cash out before someone else does it, which will of course create losses for your average Joe who just wanted to shop and eat some sushi.
Am I thinking too hard about this or is such scenario realistic? If it is, how can we prevent it?
On a side note, there is too much domain name spam from Cardano. I could open a domain like cardanohq.org and host some malicious version of Daedalus wallet which steals ADA from people. All those sites for documentation, wallet, foundation should be on a subdomain.
From my understanding of the whitepapers (please correct me if I’m wrong) a certain percentage of every transaction fee goes into a treasury to reward all stakers and also to have the funds for future developments (voted by all participants of the ecosystem)
There are also mentioned some protocol rules and mechanisms that should prevent from whales or situations like we have with the existing 3 chinese bitcoin mining pools.
I also have a slight bad gut feeling with the stake-depending probability, because it’s exactly tge opposite of favouring the unbanked. In worst case it could become a “tapping and squeezing” the unbanked.
Would love to see some clarification whiteboard video on this, because I hadn’t fully understood it.
I’m not sure if a technical limitation (regulation) of transaction amount&number per wallet and target could be implemented per definition at the protocol level. In a decentralized system a whale could prepare his cash out over weeks by splitting all his funds to thousands of wallets. So even such a technical limit probably wouldn’t work in the crypto world. But if it would be implemented many average Joe’s cold easily join the ecosystem, eat sushi and have a good night’s sleep.
I fully agree with you that the “creative” use of so much different top level domains appears pretty chaotic and very hard to understand for all new and average Joe’s. Maybe they decided to do so in order to suggest and promote a decentralized and multi-culti ecosystem instead of a centralised company and brand.
In fact that’s another thing I wonder about all this decentralised blockchains, coins and ICO’s: they all fight to have their unique brand as high as possible on coinmarketcaps list. That’s funny and strange.
Decentralisation for markets, brands and market places is the opposite of liking the superstars on facebook, having as much as possible followers on twitter and booking your next trip on booking or airbnb dot com. It’s the opposite of globalisation… Just some thoughts…
@kobov Please create a post with the heading (if you cannot find existing one using search).
A couple of threads where your queries regarding rewards is answered can be found at: (link#1 , link#2 ) and for treasury at : (link#1, link#2)