I went through it, and I can't say that it's any better than what your average corporate response is like.<p>It brushes over Sirer's points by making note of irrelevant 'achievements' they have managed. The format also reads like a high school teacher nitpicking your paper, where most of his arguments boil down to 'yeah but that doesn't <i>really</i> matter, because...'<p>I read the whitepaper (a cryptocurrency-fanatic friend pointed it out to me) just a few days before Sirer's post was published, and I noted a few of Sirer's main arguments immediately after reading it. It's not hard to understand the essential problems regarding limited reserves and market-trailing, and this response addresses nothing. It's wishy-washy investor-rubbing talk, not the legitimate debate and discourse they <i>say</i> the want.
This is... not a good response. I've been reading Emin Gün Sirer for years, and his analyses have been very sharp. He's not always right, but he's right often enough that I take him seriously. I don't think it's reasonable for the Bancor people to ask the world for millions and millions of dollars <i>and</i> be sad that people are not always warm and fuzzy in their responses.<p>It reminds me of those people who ask for feedback on something they wrote and then get upset when you give it to them. They didn't actually want feedback; they wanted compliments and ego-boosting. That's also a valid thing to want and ask for from friends when you're struggling through the writing process. But once you publish, the warm fuzzies end. Critics are not there for authors; they're working for readers.
I can't see anything substantial in this official response.<p>I am mostly seeing a mild corporate language about how they want to build the future, how their team has credentials, how they opened up for feedback on many places (<i>in the past</i>, not now, convenient isn't it?), and there was zero substance on the article up until the first quotes, and it doesn't get better from there on as well.<p>I see nothing they defend their current business with. They mostly appeal to the past.<p>And not even that, they admit they've been doing other cryptocurrencies in the past. To me that doesn't you mean you're experienced in the area and you have what to offer. To me that means you're now a seasoned veteran who can swindle people with a smile while wearing a suit and using soft language.<p>Sorry, Bancor. You need to write a substantive article to be taken seriously.
If there was a bad response to a critic, this will be it. While Sirer's post was a bit terse, this response doesn't earn brownie points by going the same route.<p>First, they start off as many "responses" in crypto currency seem to start that is - saying this is all FUD and the critic should stop spreading FUD.
They also take the Trump route, not a great choice of words - "fake news".<p>Where I lost them was when they equated themselves as being so important to crypto currency space that critiquing them can be used to tag the whole space as being a giant ponzi scheme.<p>On still persisting, I found their clarification on "asynchronous price discovery" very funny. The point of a market making algo is to "make the market" ie they have to act as counter parties to each trade irrespective of whether there is a buyer or a seller (ie not a price matching algo). The price discovery in that process happens on how the market making algo is written.<p>Though I guess being programmers and writing a document for programmers they had to go with a technical term. But with someone who understands economics on their team, they should have done away with it.<p>All said, the most important part of a market making algo is not to provide liquidity or smooth prices. As Sirer put it, smoothing prices is a bad idea. If something is volatile it is because the market deems it to be so. Going against the market is not good.<p>I hope these guys watch this video carefully to understand how trading works:
<a href="https://www.youtube.com/watch?v=RLySXTIBS3c" rel="nofollow">https://www.youtube.com/watch?v=RLySXTIBS3c</a>
> Our thinking here is that people invented money to solve the [Double coincidence of Wants] problem in barter, making trade asynchronous, more efficient and predictable.<p>Fun fact, that's not true! It's called "the barter myth", and was put forward by Adam Smith in The Wealth of Nations.<p>But anthropologists everywhere have looked for 'pre-money' societies in their field research and haven't really found any. Bartering today happens in systems like prison where people are used to using money, but they aren't allowed to have (or there isn't) any. Everywhere we've looked, we find complex systems of credit, debt and/or quid pro quo.<p>Read it in a book called "Debt: The first 5000 years".
Well they <i>should</i> learn though:<p>- Their clients tell them the message is not clear so they make a video.<p>- "Bancor is Flawed" says too many buzzwords make it unclear and fluffy.<p>- You have to Google to understand the words according to Bancor themselves.<p>- They even have to add parenthesis in this article to explain some words!<p>But they still think their message is clear. While I have no idea about this world, I do care about communicating my products/ideas. So just simplify the message, make it so people can just understand it.<p>The only place where an over-engineered message works IMO is with hyped products as everyone puts a lot of effort to understand it.<p>PS, I got lost in the article mid-way with so many acronyms while I could read "Bancor is Flawed" perfectly...
Disclaimer: I'm not well-versed in these things. Maybe I'm totally misreading the situation.<p>Their response to the "BNT is pointless" thing seems to say that BNT has a point because... they made the service require it. I still don't understand <i>why</i>, apart from the founders wanting something to sell to investors.<p>My understanding is that the main things one looks for in a reserve currency are liquidity in the international market and (relative) stability of value, hence the popularity of the US Dollar and Euro as reserve currencies as opposed to, say, the Zimbabwe Dollar. If that's true, it seems deeply counterintuitive to create a new currency to use as a reserve currency. This sparks a suspicion that the point is not for BNT to add value to Bancor, but rather the reverse.<p>Am I just misunderstanding something here?
Thanks for confirming that the original article was correct in its analysis and that you have no substantial rebuttal other than nitpicking. Aside from the <i>awful</i> usage of "fake news" (almost as though you think it makes you sound more credible), your first rebuttal is this:<p>> At time of raise its was $153M within 2:25, this has been covered widely including a formal statement on our blog.<p>I think you missed the point the article was making.<p>As someone who isn't very familiar with economics, the original article was clear and concise with very clear Gedankenerfahrung which encapsulated individual problems with the Bancor protocol. While writing technical pieces like that is difficult, this reads more like a bad teacher trying to save face when a clever student shows them up. You're just hurting your own credibility.
TBH this response IMHO confirms most of the findings of the criticised article. So thanks for the clarification, dear Bancor people. I still fail to see how your system in any way implements the BANCOR plan that Keynes had.
> Every buy and sell order is an (arguably superior) source of knowledge as to what is happening in the real world.<p>If they replaced (arguably superior) with (real if possibly flawed) I might be tempted to take them seriously. But this belief in perfectly efficient market is hilarious, especially in the face of all the people getting rich out of market inefficiencies...
> It is hard to reconcile claims like “mumbo jumbo” and “blah blah blah” with legitimate critique<p>I just watched one of their intro videos[1] and can confirm "mumbo jumbo".<p>[1] <a href="https://youtu.be/P8EoAvWfFnY" rel="nofollow">https://youtu.be/P8EoAvWfFnY</a>
For reference: <a href="https://news.ycombinator.com/item?id=14591454" rel="nofollow">https://news.ycombinator.com/item?id=14591454</a>
I'm a fan of Emin Gün Sirer and I don't like Bancor's approach in this response, especially in criticizing his informal tone (who cares?), but it does seem that they're right that he's misunderstood two main points: (1) Bancor tokens are automatically created and destroyed as needed and (2) the pool is collectively owned by all the token holders and not the issuing company.<p>Disclaimer: I don't know whether this makes Bancor great.
Another very interesting response to another critique they received: <a href="https://blog.bancor.network/response-to-bancor-unchained-cdb3bd2ba505" rel="nofollow">https://blog.bancor.network/response-to-bancor-unchained-cdb...</a>
The Double coincidence of Wants is solved by any Medium of Exchange (MoE). The bigger issue in my opinion is how to manage the creation of new MoE. The current system "solves" this by empowering a group (banks) to issue new MoE via loans. We have a significant body of history on the "efficacy" of this approach.<p>How does Crypto currency, Bancor or other, improve the management/new creation issues?
You would get absolutely slaughtered in a public market setting if this happened -- I love the idea of ICOs giving non-accredited investors the ability to invest in risky ventures, but you have to wonder about the diligence layer that comes with it, especially as organizations like Bancor do not have nearly the legal requirements for transparency.
> <i>With Bancor, there is no need for two opposite wants to exist at the same time in order for the price discovery (through actual trading) to function</i><p>I don't understand. If everyone wants to buy, nobody will trade and price discovery will <i>not</i> occur. Can someone please help me understand this?
This response boils down to a combination of ignoring critical parts of the original post and repeatedly arguing that "yes, we're a ponzi scheme, that's why you want to get in early!"
Their response to the front-running issues is great. "B-b-but miners <i>will</i> behave!" and "Hey, ya ok, so that's bad but like, someone will fix it so whatever".
The first-up response was on Twitter: <a href="https://twitter.com/BancorNetwork/status/876934646344404992" rel="nofollow">https://twitter.com/BancorNetwork/status/876934646344404992</a> <a href="http://archive.is/75Gqk" rel="nofollow">http://archive.is/75Gqk</a><p>"This hack job, like the FUD you intentionally spread right before the fundraiser with NO ATTEMPT to contact the team will not age well Emin"<p>(the responses go into his attempts to contact them ahead of time)
After reading the comments on HN, this response is so flawed and disliked that the next post may be:<p>'Offical Response to the flawed "Bancor Is Flawed" Official Response'
I'm flabbergasted by these ICOs and the monetary values associated to them. But that's just the tip of the iceberg really.<p>Then I think "well, let's see what this startup getting founded wants to produce". And then invariably it's some super "high concept" ultra-virtual "product" that is directly related to ethereum itself.<p>It's not a new google, facebook, uber or dyson. No it's a protocol that "enables built-in price discovery and a liquidity mechanism for tokens on smart contract blockchains" or sometimes "an open source messaging platform and mobile browser to interact with decentralized applications that run on the Ethereum Network" or even "a new exchange that facilitates secure trades between people from bank accounts to CryptoCurrency".<p>I'm a coder, I think I have a good general knowledge of how a blockchain works, I even have a passing knowledge of what those smart contracts are and how they're implemented (not enough to, say, implement them correctly myself but definitely more than 99.99% of the general population). Then I read about those innovative products and I'm simply drowning in a see of virtual concepts built on top of other virtual concepts. A concept of a concept of a concept.<p>See this for instance: <a href="https://www.youtube.com/watch?v=P8EoAvWfFnY" rel="nofollow">https://www.youtube.com/watch?v=P8EoAvWfFnY</a> (avoid the comments at all possible cost).<p>I've watched the video, perused their website and I'm still not clear at all about:<p>#1 who needs this?
#2 why do they need it?
#3 how will bancor make money from this?
#4 why do they need $144M to do it?
#5 what prevents anybody else from just using the same algorithm and providing the same service at a lower cost?<p>The video even ends with the CEO admitting "we're only beginning to discover the different use cases". Well, looks like you have over a hundred million dollars to finish your homework now.<p>It's true for that bancor project, it's also true of <a href="https://status.im/" rel="nofollow">https://status.im/</a> and a few other big ICOs I've seen in the past few weeks. Projects coming out of nowhere and raising a ridiculous amount of money. And then I google for those projects to see what others think about them and 99% of the hits are only talking about... the ridiculous amount of money they raised and nothing else.<p>I'm not saying that I'm certain that ethereum and those ICOs are scams but I think the ethereum community should work a lot harder to better explain what they're building exactly, because I'm pretentious enough to believe that I'm not dumber than all of those folks who've just collectively pumped millions in those ICOs. I'm willing to bet that many of those people are not betting on the products (or even that they understand those products), rather they see the insane valuations of cryptocurrencies and they want a piece of that.
> Should all token development stop now that we have ETH? Should ETH never have been created because we had BTC? Should BTC never have been created when the USD was already a liquid medium of exchange?<p>Bitcoin was created because it isn't possible to do Bitcoin with USD.<p>Ethereum was created because it isn't possible to do Ethereum with BTC.<p>Bancor was created because you want to make fat stacks of cash. It would work just as well (or better) if it was using ETH directly instead of having its own token.<p>Disclaimer: I am almost completely uninformed about Bancor.
What is wrong with the Bancor team defending themselves from unjustified, and close to vulgar, criticism? They gave very clear arguments, and you try to turn it into an emotional fight.<p>As a professor you should use exclusively rational arguments, and under NO circumstances emotional manipulation. It seems you've been paid enough to do the opposite. Shame on you!