Two days ago, Stripe announced they were dropping Bitcoin. And now Stellar (A Stripe-seeded company) announces their 2018 plans. Good job on the guy that saw it coming in HN comments!
Note: I'm not bashing Stellar, I'm actually a big fan.
In 2014, Stripe gave Stellar a $3 million loan in exchange for 2 billion lumens, which is now worth around $2 billion. They still have those lumens. I wonder why they would drop bitcoin support and start pushing Stellar...
Per Stripe's original announcement[0] in 2014 – the net profits from any sale go back to the Stellar Foundation:
>> When the opportunity arose to help Stellar, we enthusiastically agreed. A couple of months ago, Stripe contributed $3M to help get the project going. In return, we received 2% of the stellars. However, the project is not run by Stripe. We just believe that a system with properties like Stellar's should exist in the world, and we heartily encourage anyone interested to participate in its development. We're going to auction a majority of our stellars to other interested companies, with any net profits being returned to the Stellar Foundation
Doesn't say the net profits from "any sale" go to the Stellar Foundation, only the net profits from the "auction [of] a majority of [their] stellars." Presumably they could sell for profit their 1 billion stellars for profit without violating this pledge.
Indeed, this is my biggest issue with all the market-cap numbers we keep seeing.
The market-cap is a made-up number calculated by (current_price x num_tokens). Except that current_price isn't fixed and the buying and selling will change it. You aren't selling to an infinite buyer market either, so you can't just sell everything at once to extract that value in one go.
A company is valued in terms of the currency in it's stock exchange. A company in US has it's market cap in USD and a Japanese company has it's market cap in JPY. If you want to calculate the market cap in USD for a Japenese company, you have to use an exchange rate.
Now since cryptos are currencies themselves, it makes no sense of talking about a market cap. The market cap of stellar is the number of stellar available.
The market cap of a real currency like USD is the money supply. The money supply has probably a couple dozen different definitions depending on how you want to look at it and the fungibility of different representation of money. (Eg does it really make sense to consider burned bitcoin or satoshi's supposedly "never moving" bitcoin as part of the "money supply")
There is a reason forex market economists/analysts don't talk about the "market cap" of the Japanese Yen or market cap of the British pound.
There is also the whole intrinsic value of a company part. People buy stock because they believe the company is worth more than other people do. They (except for minor exceptions in the case of small investors) judge the companies future ability to generate profits and cash to decide on whether the buy or sell the stock. People buy crypto on pure speculation that other people will buy crypto in the future.
The same issues apply for thinly traded "penny stocks", and you'll see similar caution about believing market cap numbers for those companies. For blue-chip stocks the market is deep enough that you can more-or-less trust the market cap number. But yes, the only "true" valuation for anything is what someone will pay for it, the only way you can get a real answer to "what's the value of all stellars outstanding" is to collect a bid and an ask on that.
Amazon's balance sheet [0] shows assets minus liabilities of $19 billion. So the "assets" that shareholders "own" are less than 3% of the company's $690 billion market cap.
Not to mention that shareholders don't "own" those assets in any real, tangible sense.
If you look around at any form of wealth, from the balance in your checking account to stocks, bonds and even the title on real property, it's all invisible, intangible and socially constructed.
Not as different from cryptocurrency as one would like to think.
> digital things can't have value because they aren't real
That's basically what you are saying.
Here's the thing though. Crypto currencies can have lots of uses. And even "simple" ones "only" made for payment like XLM and XRB have a value when they let me transact fast and cheaply.
I look forward to a future where my money is mine. Where no bank can arbitrarily decide to FREEZE MY FUNDS that I have LOANED TO THEM. The banking system is broken. Sure it gives us some nice things in return like fraud protection. But increasingly I begin to wonder whether the advantages of trad-banks are worth giving them control over my money, and increasingly the answer seems to me to be no.
> digital things can't have value because they aren't real
I don't think he's saying that at all. Google is pretty digital but has value because it has millions of paying customers. With things like dogecoin the value proposition is more questionable.
Traditional crypto mining burns real energy that costs real money and has a real carbon footprint, and the owners of the rigs have real pride that create a floor of how much Bitcoin will be worth, so long as it's technically sound.
But Amazon's value is not based on it's assets. What is the value of AWS? Is it the physical servers and data-centers? Or is it the knowledge and systems which make it all operational.
If you can accept the later is where the real value is, eventually you're going to get to the point where you see the REAL value is in putting these pieces together into a system where a customer can exchange $$ for the value being created.
Then look at somebody like Stripe, and say, they make all the $$ just facilitating the exchange of $$ online.
Now, all of a sudden these other crypto services that enable the exchange of $$ don't seem so out there or do they?
1. Crypto-assets like Bitcoin/Ethereum/Steller/Ripple, etc, are created simply by typing some numbers into a piece of software. There's no underlying value, it's a number in a database.
3. Anytime someone sells a Bitcoin or whatevercoin it requires a buyer. Similar to baseball cards, beanie babies, or other artifitially scarce yet easy to produce asset, the market is subject to supply and demand. In the case of cryptocoins, the supply is created and distributed to a small group of users who horde it, in the hope that new users will come in and purchase the coins for more than it cost to create them. This is a hallmark of a typical pyramid scam, which collapses once no more investors can be found, leaving the late adopters holding now worthless "coins".
4. Stocks in Amazon and businesses grant you legal rights, and if the company goes bankrupt you are entitled to compensation from their assets.
How long do you think Amazon's stock price would stay high if no new investors could be found? Don't dig too deep into what separates stocks and government issued fiat currency from pyramid schemes or what you find will trouble you. In many ways, crypto is the safer of the two. A finite amount of bitcoin will be created, can you say the same for the US dollar?
My view is that everything is a pyramid scheme from the first wampum and beads that were traded by humans on down the line to where we are now. The difference is crypto is a chance to get in at the top for once. That chance was missed ages ago by our generation with regard to the US dollar.
> How long do you think Amazon's stock price would stay high if no new investors could be found?
If, in your hypothetical example, the reason there were no buyers was completely unrelated to the performance of Amazon as a company
And the price of Amazons stocks dropped enough, eventually it would reach a point where Amazon would start buying its stocks back as it would be financially nonsensical to not do so
The difference is crypto is a chance to get in at the top
for once.
Not if you buy other cryptocoins like Bitcoin or Ethereum that someone else created for nothing to sell to bagholders. All you're doing there is becoming a late adopter and you must pray you're not too late in the pyramid that you'll be able to sell to some other speculator at a price higher than you bought meanwhile you're at a 1000x-10,000x disadvantage to anyone who acquired the coin for pennies/fractions of the cost to you. Simple game theory.
Anyone who wants to just needs to create their own crypto-asset and market it like the others to convince "speculators" it's worth purchasing.
Notice how bitcoin/cryptocoin advocates tell others to "HODL" - psychological manipulation is needed to maintain the artificial market scarcity as there's no real demand, use, or acceptance from retailers. [1]
If you're genuinely concerned about control of the money supply, you would voice concern about how cryptocoins are majority owned by only a few hundred people [2] and because of how tether [3] has been marketed and used on exchanges it's essentially like the federal reserve of cryptocurrencies except it's just 2 guys and it's alleged to be backed by nothing which could mean they're stealing large amounts of cryptocoins. Given all the theft in the cryptocoin system, one might wonder if regulations and security standards exist for a reason. What happens if thieves become the majority wealth holders of all the cryptocoins?
That's a lot of bots trading back and forth, though. Different to actually try to sell a crap ton of newly circulating currency. Not to mention that transactions are traceable, so people would immediately know that Stripe is selling
I was starting to grow pretty concerned but clearly segwit and LN have made enough progress that fees have dropped to ~10sat/byte. [1] That is dirt cheap.
I feel really stupid. Back in 2015, their lead scientist David Mazières explained Stellar consensus protocol inside the Gates computer science building at Stanford to a small group of people back when Lumens were worthless. I was in that group of people and I completely missed the boat.
I agree with you in general but in my case, Bitcoin had already experienced several booms and I was aware of the crypto-[mb]illionaires back then. Either way, if I would've jumped on the "get rich" bandwagon, I might actually be today.
I made and lost 30k speculating on dumb stuff like Mazacoin and Auroracoin. I avoided looking up any numbers for a long time, but my non-tech friend asked me the other day what it would have been worth. If I had invested 20k of that in the Ethereum presale, it would be worth 30 to 40 million dollars (or would have been when the market was high).
Could kick yourself for stuff like that (I read the initial posts about Eth here on HN, figured it would be valuable, didn't know how soon it would be valuable), but the market was scammy even then. Mazacoin was supposedly going to be the first official coin of one of the Sioux reservations; that was exaggerated, didn't keep it from spiking 10x overnight.
There's nothing special about making a fortune gambling and taking money off other dummies throwing money into the hype. Regular people are getting hurt by this. For every big winner, there's some family who had a dad who mortgaged their house and lost it all. Maybe that's post hoc justification of missing out, but there's nothing to be proud of.
edit: doing the math as of today; $24k would have bought you about 80k Ether at the presale price of 2k eth per Bitcoin (about $600). 1 eth is about $1050 today, at a value of $1k that's 80 million dollars. The fortunes that people can and have made at out of this are absurd.
>> For every big winner, there's some family who had a dad who mortgaged their house and lost it all.
That's silly. Just look at the growth in the total crypto market cap over the last few years (or even over the last six months) and it's clear that this can't be true.
The vast majority of people who have been involved are way ahead.
> The vast majority of people who have been involved are way ahead.
Strong disagree :(
Cryptocurrency investment is speculation in a zero-sum game. Every dollar someone pulls out of the system in profit required someone else to put a dollar in. All those people who sold bitcoin at $19k could do so because there were buyers. Every single one of those buyers lost.
Cryptocurrencies are not shares in a corporation or bonds or any sort of interest or dividend producing financial instrument. Even the ICOs that claim to be so only work when new money is coming in. To get a (real) dollar out of the system, someone else has to put a dollar in. To get more money out of the system than you put in, someone else has to pay. For that person to get more money out, more people have to come in after them and pay. The top of the pyramid gets paid, the bottom is left holding the bag.
The only growth in market cap is new money flowing into the system. Once enough decides to flow out, the gig is up and the whole thing tanks.
great comment BUT real world finance works like that too except USA keeps its currency in demand by forcing international trade especially oil to be settled in USD and invading countries who resist. Macro voices podcast went into that in super depth https://www.macrovoices.com/podcast-transcripts/341-anatomy-...
People are way ahead on paper, but for them to realize their gains would require a whole lot of other people to buy in. When we look back ten years from now it's possible that only a minority of people will have profited.
How many actual $$$ millionaires are there really? With old currencies in old-fashioned off-shore bank-accounts? After all, it's still the govt controlled currencies that buy you houses, supercars and tropical islands. /s
It's all speculation. There are tons of markets out there seeing similar inflation, though the geek crowd only focuses on the cryptocurrencies.
Like all speculation, for every winner there are hundreds of losers, and hindsight is 20/20 but it's impossible to reasonably predict the future outcome.
I think, given the extreme bullishness of this area over the past few years, the opposite is more likely true: for every loser there are hundreds of winners.
That's because a lot of current crypto holders are potential future losers.
If you settle all crypto in USD today, most people will be left with close to 0.
Isn't this insane though? When else would anybody be at a lunch talk where somebody goes over a consensus protocol and the idea would be "holy shit we are going to be rich by buying some tokens". If Dan was giving a talk on some new thing using multilinear maps nobody would say "oh fuck I've gotta get in on this and I'm going to be a billionaire". If Alex was giving a talk about some new way of doing superoptimization you wouldn't be interested in buying "STOKEcoin". Even when Dawson was doing the early stuff that turned into Coverity, nobody looked at the foundational algorithms and said that they should invest in the algorithms. You need to build a company that does something with a product.
Dave is a brilliant guy. But the response to a lunch talk shouldn't be to invest in tokens.
The Stripe blog post mentions OmiseGo. OmiseGo hasn't even launched their product and Stripe is considering using them. That's a little worrying, but suggests it's still early.
>swanson: Related to the Coinbase/insider trading noise around BCH a few weeks ago, it seems strange for Stripe to plug other alt-coins (OMG, Stellar, etc) in the post as things they view as "promising" and "imagine enabling support for". I don't think it's illegal nor unethical personally, but it is such a dicey topic that I'm surprised to see someone writing without a mountain of disclaimers on an official Stripe communication channel
>>ChristianBundy: FYI, Stripe has been very transparent in the fact that they believe (and have pumped millions of dollars into) Stellar
It's been public since about Jan 3 that the roadmap would be released on/around Jan 25. Here's the earliest mention I can find (it might not be the earliest mention, though):
As many developers visit HN I will use this opportunity to advertise the Stellar Build challenge[1]. I participated in the past and it's great. Especially to build some fun side projects, learn about distributed ledgers and earn a bit of money.
You can make well over a few thousand dollars for learning about crypto and working on a interesting side-project.
I agree to this. If you are interested in getting involved with building a crypto project, but can't justify the time: check this out.
Stellar runs a monthly give away of Stellar coins for submissions by developers. They set out a overall vision of projects, and reward a certain designated amount of coins to the finalists.
Thanks for this. Now what do I do, though? I'd rather not mess this up. I can log in to launch.stellar.org and can "upgrade" to lumens. Do I do that? My goal is to sell them for USD.
Yes, I went through that process and it was pretty painless. I recommend going the extra step and getting a secure wallet to store them in. Ledger (https://www.ledgerwallet.com/products/ledger-nano-s) has an app for Stellar Lumens.
A secure wallet is not super helpful if immediately cashing out (to fiat), right?
A legitimate, soup-to-nuts "turn one email into $___ in cash" walkthrough (perhaps the beginnings of which is below, though I can't personally vouch for it) would do well!
(Search "2. Stellar" [no quotes] twice; does anyone know how to link directly on Medium? This piece focuses more on breadth than depth, covering multiple cryptocurrencies. The only useful Stellar info there seems to be https://launch.stellar.org/#/login)
* transfer the stellars there, making sure to follow the instructions about the MEMO_TEXT.
* convert the lumens into bitcoin
* transfer the bitcoin to coinbase
* sell it.
There is probably a more optimized or less expensive way to accomplish this, but this was the easiest way for me, and binance did not require a social security number or photo id like some sites wanted.
Ha! Found the email, recovered the account and found 125.899988 lumens. Wonder what I did with the rest? Not sure if they were 6000, or 500 or something else.
It was 6000 in the original airdrop, and after that there was an airdrop against bitcoin addresses in a proportional fashion (only if you chose to claim them, if i am recalling correctly.)
There was one where you signed up with Facebook and got 5k too. I got quite a chunk of change by getting all my friends to log me in with their accounts.
There was a guy who scripted himself a huge number of the facebook giveaway airdrop. I have vague recollections of his hoard being invalidated via a hard fork or some other method!
My account was corrupted during the migration from STL -> XLM. Not even my recovery code works. Multiple support emails with Stellar and no dice being able to access my XLM :( .
Same here; recovery code doesn't work. I reached out to them with no response. Not very promising that they couldn't even migrate early adopters over safely.
Thanks for this. I had bought a couple of bitcoins in 2014 just for kicks and don't even remember signing up for Stellar- even though I recently bought some on the market. Saw this message and checked my email and lo and behold- You've got Stellar. Recovering and upgrading was a breeze. I'm $3600 richer.
I recently started looking into Lumens and can't figure out the value proposition of the token.
AFAIK the stellar network purports to be a place where you can do peer to peer exchanges of currencies, with Lumens being one of them, but on the stellar website they say things like:
> Why does the Stellar network need a native asset?
> The Stellar network offers all of the innovative features of a shared public ledger on a distributed database—often referred to as blockchain technology. The Stellar network’s built-in currency, the lumen, serves two purposes:
>
> First, lumens play a small anti-spam role.
> Each transaction has a minor fee—0.00001 lumens—associated with it. This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack). Lumens work as a security token, mitigating DoS attacks that attempt to generate large numbers of transactions or consume large amounts of space in the ledger.
>
> Similarly, the Stellar network requires all accounts to hold a minimum balance of 20 lumens. This requirement ensures that accounts are authentic, which helps the network maintain a seamless flow of transactions.
>
> Second, lumens may facilitate multi-currency transactions.
>
> Lumens sometimes facilitate trades between pairs of currencies between which there is not a large direct market, acting as a bridge. This function is possible when there is a liquid market between the lumen and each currency involved.
and
> You may choose to purchase lumens as a supporter of the Stellar.org mission.
> Why does the Stellar network need a native asset?
> The Stellar network offers all of the innovative features of a shared public ledger on a distributed database—often referred to as blockchain technology. The Stellar network’s built-in currency, the lumen, serves two purposes:
> First, lumens play a small anti-spam role.
> Each transaction has a minor fee—0.00001 lumens—associated with it. This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack). Lumens work as a security token, mitigating DoS attacks that attempt to generate large numbers of transactions or consume large amounts of space in the ledger.
> Similarly, the Stellar network requires all accounts to hold a minimum balance of 20 lumens. This requirement ensures that accounts are authentic, which helps the network maintain a seamless flow of transactions.
> Second, lumens may facilitate multi-currency transactions.
> Lumens sometimes facilitate trades between pairs of currencies between which there is not a large direct market, acting as a bridge. This function is possible when there is a liquid market between the lumen and each currency involved.
> You may choose to purchase lumens as a supporter of the Stellar.org mission.
Thanks. I had thought there was some way to format quotes, but after looking at the HN formatting doc [1] I see I was mistaken and I used the styling intended for code formatting.
As far as I can tell it's not centralized. It runs faster than bitcoin or ethereum because they do not have proof of work and don't spend time doing hashes. Instead every 4 second or so all the servers put out their version of the new block and the 'consensus' is chosen. I think - I'm new to this.
It is the same as the Ripple network and XRP. XRP or lumens are the native currency of the network. Every other asset traded is an IOU.
You can represent any asset or balance as an IOU. Your bank account is USD/Bank-of-america for example.
So the idea behind Stellar and Ripple is that you can represent and trade IOU's. But the intermediate without an IOU is the native currency of the network.
I am pretty happy with my Lumens. I got them during the initial airdrop and then later I got more. I followed on and off what is happening and Stellar really looks promising to me. Transactions go very quickly, api is decent and fairly easy to work with.
As far as Coinbase, I don't think they are very good in handling things, BitcoinCash didn't go well. It would make sense for them to support Stellar, but who knows what they are planning to do. It would make sense to support a bunch of other as well.
The biggest problem for me, which prevents me from commiting to stellar is that they have just 2 engineers in Poland on Linkedin. Comparing to Ethereum Foundation it sounds like a joke. Where are those engineers who support infrastructure?
The roadmap is fairly general, not detailed enough, and not serious enough. It makes Stellar look like another startup, not like a company which wants to be the next paypal or replace bitcoin.
I think most of those cryptocurrency companies need to invest in their communication, PR and marketing in general. If they want to attract investors in their coin, they need to have a perfect communication, inspiring confidence. This would always be better than a stupid blogpost full of jokes...
But this is a forum of developers so I am not sure how this tribune for marketing is going to echo here ;)
I get it that it's a major use case for platforms allowing to issue tokens, but I would love not seeing stellar going too far down the ICO road.
Buying in ICOs still doesn't provide any kind of clear value (beside selling them) and issuing tokens could be used to do way cooler things (like issuing state branded cryptocurrencies, or temporary currencies for big events, etc). It's kind of sad that ethereum is mainly seen nowadays as "the cryptocurrency for ICOs", I wouldn't want to see that for stellar too.
My coins that I had since 2014 were 'corrupted', and unrecoverable, even though the only thing I have is the exact code that the stellar website and email sent me.
Any coins that are unclaimed will be reallocated to the Stellar foundation. An optimistic view may hold that they might attempt to give them away to more people. A pessimistic view may propose that they're now able to sell them without looking like they're trying to make money.
Honestly, I don't care what happens to the coins after they were taken from me, just like I don't care if someone steals my car and joy rides with it, or steals my car and drives their grandma to dialysis with it. The fact that they knew there was a technical issue, but didn't try to redistribute the coins at the time they recognized the issue. I realize this is like $1 we are talking about, but hey, that's loss aversion for you.
Heh, remembered they existed because of the hype on it now. Turns out I had the 5000 signup stellar coins lying around. Easiest 2700 bucks I ever made.
How did you manage to do this? I'm in the same boat. I have the username, password and recovery key yet I can't login and the website tells me that recovery has been disabled for my account.
Same. Friend of mine tipped me off to having rediscovered his account, I gave it a try, and everything worked out after the conversion to the new platform (which is when STR became XLM).
A few years ago, I think I got something like 5K lumens from stripe in some sort of public giveaway stellar promotion thing. I have an account name and a password but cant figure out where those fit anymore. Any idea where that might be?
I signed up for stellar when it was first announced and have about $1000 of stellar. Despite a whole bunch of emails, I'm still unable to access my account.
High volume, low latency, of privacy focused applications.
There's a difference between Stellar's network being able to support high throughput and you wanting to do high-throughput on the network.
Base fee is 1e-5 XLM. If you want to do a million transactions, it's still going to cost you 10 lumens. Why pay 10 XLM when you could pay 1e-5 XLM instead?
I think it's a matter of quickly setting up and closing an off-chain ledger, rather than supporting more transactions or keeping transaction costs low. Privacy could be a reason to do this, but I'm sure there are other reasons, too.
It was initially a fork of Ripple but has since been rewritten. Stellar is more decentralized, because each node decides which others to trust. In the Ripple network, certain nodes have been blessed as "validating nodes".
> Tl;dr: Stellar’s protocol (SCP) uses a decentralized state propagation where each node commits to a value if every node it deems trustworthy agrees while Ripple uses a supermajority vote (80%) among all validating nodes. Stellar achieves better decentralization than Ripple
> In SCP, each node decides for itself which other nodes it trusts. When a lot of these sets of trusted nodes are overlapping, there is a high probability there is agreement on the state of the network. Broadly, a node will only accept a message if all of their trustworthy nodes have in turn accepted it. This is similar to the way internet certificates and DNS servers are working. In principle, there is no central authority appointing trustworthy nodes, but de facto, the network will reach an agreement on which nodes are trustworthy. This is a great video explaining SCP in detail [https://www.youtube.com/watch?v=vmwnhZmEZjc]. There is also the white paper [https://www.stellar.org/papers/stellar-consensus-protocol.pd...] for more formal mathematical definitions.
> Ripple on the other hand uses a set of special nodes called "validating nodes". A new state is transmitted to all validating nodes and whenever 80% of them agree on it, the ledger is updated. Anyone can launch a validating node, but Ripple recommends they register and disclose their identity [https://ripple.com/dev-blog/validator-registry/]. In principle, this model doesn't make Ripple less decentralized than Stellar. However, in practice, the company Ripple controls most validating nodes, as there is no incentive for anyone to run these nodes (transaction fees are destroyed). You can see a list of validating nodes here: https://xrpcharts.ripple.com/#/validators
> Another difference is that Ripple is a deflationary currency (a certain amount of XRP is destroyed at each transaction to prevent spamming the network), while Stellar is inflationary. This doesn't necessarily mean that Ripple is a better store of value, since all inflation is returned to Stellar users through inflation pools.
> Other than the technology, it is important to mention differences between development philosophies that are driving the two projects: XRP is developed by a for-profit company (Ripple) while Stellar is developed by the Stellar Development Foundation which is a non-profit. Stellar places a greater emphasis on serving the underbanked and facilitating payments between individuals across borders, while Ripple is mainly focused on financial institutions.
Yes it's centralized by any reasonable definition of the term. You rely on a set of trusted third parties to establish consensus on the ledger's state.
Note: I'm not bashing Stellar, I'm actually a big fan.
: https://news.ycombinator.com/item?id=16216329