This is an important separate topic inspired by the ongoing debate in Will the ADA Whales Ever Give Up Their Power? (Please respect the distinction between these two topics and post in the correct threads to keep our discussions as focused as possible.)
Cardano’s Purpose. Somebody in our community recently said that early investors in Cardano deserve to control the ecosystem because they invested first and took early risks. That would be true if we were talking about a for-profit corporation like Apple or Goldman Sachs, but that’s not how Charles/team are presenting Cardano to the world. Cardano is not intended by anybody on the founding team to be a for-profit corporation; it’s intended to be a trust-less socioeconomic platform and crypto-economy for humanity, upon which many smart-contract-based socioeconomic tools and institutions can be built. Charles has described this in many ways in many interviews. That’s why I’ve invested in Cardano/ADA; profit considerations are purely secondary to that primary purpose.
Lucky Birth & Geography Should Not Create a Cardano Aristocracy. Every violent revolution in human history has been caused by oppressed people rising up against the tyranny of inherited, concentrated aristocratic wealth and power. That tyranny is always rooted in poorly designed economic systems and incentive structures. If we assume that it’s OK to accept a despotic level of economic/political control over the Cardano ecosystem (over the long-run) simply because the early investors were born in the right place at the right time, then we are ignorant of history and ignorant of the inevitable catastrophic consequences of oligarchic/aristocratic domination of an economy.
Prioritizing Purpose Over Profit Does Not Eliminate Profit. I am a capitalist, an investor, a corporate executive in the FinTech industry, a published book author in the field of International Political Economy, among other things that give me “capitalist street cred,” but I also understand how to distinguish between profit and purpose, just like Adam Smith did. So, of course I understand that investors in any project should receive a positive return on their investment, but that’s not the primary purpose of Cardano; and we can be certain the early investors know that. But let’s define “profit” here to make sure everybody can see just how “communist” we are for daring to prioritize purpose over profit. . . .
How Much Profit Have the Whales Already Received? Let’s do the math:
Price Paid in 1st Voucher Tranche: 1 Yen per 9.7 ADA
Average Price Paid Across all Tranches: 1 Yen per 8.5 ADA
JPY/ADA Price Today (2/22/2018): 1 Yen per 0.025 ADA
Voucher Tranche 1 Profit: 39,000%
Avg Profit Across All Voucher Tranches: 34,000%
And if we performed these calculations in early January during ADA’s peak prices, the profits would be ~3x higher.
Connecting Reality to Purpose. Given the following facts . . .
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The primary purpose of Cardano is to build a trust-less socioeconomic platform for humanity.
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The primary purpose (by definition) of every project should be given a higher priority than all other factors.
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The whales have already received at least 34,000% profit (unrealized); and some have received over 100,000%, depending on when and how much ADA they’ve already sold. That’s already more profit than most investors ever get in their wildest dreams.
Are We Being “Communist” or Threatening the Sanctity of Capitalism? Is anybody in this community going to claim that capitalism is being threatened because many of us in the community want the team to prioritize the purpose of Cardano above profit motives? Is anybody in this community going to claim that investors are being injured merely because we want to gradually reduce the concentration of wealth/power of the whales over a gradual period of time after they’ve already received at least a 34,000% profit (as of this moment), which will most certainly exceed 1,000,000% profit by the time they actually liquidate their ADA positions according to the rational framework I’ve described in my original whales post?
Do We All Understand Economic History & the Fundamental Purpose of Cardano? If anybody in this community still believes that the whale debate is about communism vs. capitalism or thinks that the threats I described in that thread are unrealistic or over-exaggerated in any way, then they have never actually read Adam Smith’s Wealth of Nations or his Theory of Moral Sentiments (or any other serious economist), they know nothing about economic history, and they have no meaningful understanding of the catastrophic consequences of allowing an oligarchy to own and/or control an entire economy.
Some People Lack the Knowledge and Experience to See and Understand Certain Risks, But That Doesn’t Mean Those Risks Don’t Exist. There are a couple humans (I assume they’re humans, but they act more like trolls.) in the whales debate thread who insist on over-simplifying and ignoring all the risks described in that thread. When they do this, they reveal more about their age, education, and experience than they do about the actual risks they are naively ignoring. I’m sparing them the embarrassment of calling them out by name, but hopefully they will spend more time studying economic history than making false accusations and unsubstantiated comments from this point forward.
This is Not About Communism vs. Capitalism. As always, my intention is never to offend anybody, but some of the responses I’ve seen in the other thread about “communism” and other pseudo-economic nonsense reflects a deep misunderstanding of economics and economic history. My degree is in International Political Economy and my professional background is in FinTech, cryptological linguistics, commodities trading, and software engineering. I would not be here discussing these principles today if I did not have a strong academic, technical, and real-world professional understanding of the risks and opportunities that we face as a community today.
Reviewing Our Goals as a Community. In life and in business, whenever we establish priorities about how to spend our scarce time and resources, we must make trade-offs based on the goals we want to achieve. IMHO, the highest priority and primary goal should be to earn and preserve the trust of every human on Earth today who is evaluating Cardano’s actual level of wealth/power/network decentralization, which is why I created the whale thread. Why should that be our highest priority (excluding the obvious technical priorities)? Because every serious student/scholar of Political Economy knows that the ADA economy is doomed over the long-run if it is controlled by a relatively small number of whales that can control all the decision-making processes. Anybody who does not grasp these realities is either focused on short-term speculation or they have no meaningful economic/geopolitical education.
What Do You Think Cardano’s True Purpose Is? Do you agree with my points here or do you have a different perspective? I think this is one of the most interesting and important topics that our community can discuss because our perception of Cardano’s purpose will determine whether we will stay together as a community or fork off into different communities later. Forking early is much easier than forking later; so, there are good practical reasons to start this discussion now. I look forward to all your thoughtful contributions.
