The Codes of Confidence?
Well, we finally got the news thanks to Jeff Kauflin at Forbes – in his great article about Hashgraph, minutes ago… That’s what I wrote in March of 2018. But it takes time for the gurus to look things over. Guys and gals who have been at the coding tables for years, cranking out successful blockchain projects. Things like EOS and Ethereum.
So, is it (the Hedera Hashgraph) an investment? A coin? A token? What’s the price? How many altcoins will they “create?”
We’ve been hearing about Hashgraph over these past months, some of us a bit longer. Now the worm has turned and we are hearing more about it. Things like, maybe it’s not all that special. As time passes and experts are able to view the Hedera code, we should know more.
It’s a competitor to bitcoin and the blockchain and promises far faster transaction times and/or volume, without using a blockchain. But is this true? It remains to be seen.
It’s called a DAG or directed acyclic graph. But are DAG’s all that great? Recent comments from Vitalik Buterin (of Ethereum) makes me wonder:
“…[What] they do not solve is the scalability problem.”
“There is a difference in quantity and quality, validated versus unvalidated. If all you’re trying to do is order events without consideration of validity Hashgraph can work, but if you need to do dependent relationships between them I don’t think it’s so scalable.”
Dan has several successful projects under his belt. Both he and Vitalik are great touchstones.
Other interesting but not so upbeat facts from the Hedera Whitepaper:
- “Swirlds owns the intellectual property rights…”
- “The Hedera Hashgraph Council has a license from Swirlds to use [it]…”
- “Hedera Hashgraph Council will pay Swirlds 10% of revenue (with monthly minimums).”
- “Swirlds will own 5% of Hedera coins.”
- “Hedera and Swirlds will use the patent rights…defensively to legally prohibit the forking of the codebase and the creation of a competing platform and currency.”
- “…it must be capable of enabling appropriate Know Your Customer (KYC) and Anti Money Laundering (AML) checks.”
- “When the Hedera governing body releases a software update, all honest network providers will have their software automatically update, and all will do so at exactly the same moment in history.”
And if you notice, the same people who are involved with Swirlds are also part of Hedera. The separation of “church and state” is merely a business one. In that way, it’s similar to the Ripple/XRP divorce of late. And it does not bother me that they are a for profit company. You are free to invest or not.
Arguable statements in the Hedera Whitepaper.:
- “The hard forks that Bitcoin and Ethereum have experienced have arguably damaged the network effect of their corresponding currencies, creating confusion and uncertainty in the marketplace.”
- “…the explosion of altcoins (and the dubious legitimacy and value of many of them) does not engender the necessary confidence in businesses and consumers considering adopting cryptocurrencies.”
Again, the emphasis is mine.
Both of the above statements are subjective. Certainly, fixing a problem using a “fork” might slow the network, but the underlying goal is improvement. Is it really damaged at that point?
And competition? Again, the assertion of “dubious legitimacy” is a loaded bit of verbiage. Any bad crypto’s are jettisoned naturally. It is a buyer beware market — a free market. Besides, who legitimizes a coin? The government or its users? Obviously, if a coin rips people off, they stop using it. Hedera implies that they wish to exist in a “controlled” market. A heavily regulated one and copy the 1968 governing models of VISA? Did they miss the point of bitcoin?
No, it’s not take over the world! It’s much simpler than that. I sum it up this way, selfishly, as in the Ayn Rand kind:
It’s my damned money.
And “necessary confidence” as it is stated? What is that? Is confidence only established when “forks” are (allegedly) made impossible by the code? Is Hedera that secure? Or is confidence in bitcoin and Ethereum something that Hedera has not contemplated? A confidence derived from the fact that bitcoin and similar are not businesses? That, ideally, no regulatory body on Earth can change them? That no council can freeze them and no government can seize your virtual coins? If that’s not confidence of a more perfect nature, then I do not know what is.
The 100 Million Dollar Boondoggle?
Is that why Hedera Hashgraph has recently raised 100 million from its token sales. To plug the holes?
You can read more about on their new website here. “Hello Future.” Really?
Suffice to say…it does not appear to be “open source” (yet) and you will need to be an accredited investor to buy into the “SAFT” tokens. And then pray.
Perhaps Hedera Hashgraph can snag some wind from the sails of the more decentralized, but less professional, cryptocurrencies. Maybe not…
The upshot is that this system will be governed by a “global governing council” from blue chip companies – 39 (maybe) in all. Currently, these companies are not named or I haven’t seen any recent news about them. It doesn’t make me feel all warm and fuzzy though. How about you? Are you global? VISA is.
It also remains to be seen how the new Hedera Hashgraph will cooperate with governments to provide them “with the oversight necessary” and what that entails. It sounds costly and I’m curious of the 100 million will help to set that up.
To state that the process is decentralized, does not wash, however, when it is compared to things like bitcoin, Ethereum, and even XRP’s. This (Hedera) is a controlled thing. Regulation for all those compliant businesses. Resistance is futile.
These aren’t idea men, they are not leaders in the Fintech world. They are the ‘Hashgraph Herd from 1968.’
On the other hand, it may give Ripple and similar – a run for the money. But I’d venture a guess that it will be a few more years before we know.