Bancor networkAs we had mentioned in a previous post there was a lot of concerns related to the Bancor ICO as they started with a one hour uncapped round and the Bancor Controversy was born. Many were concerned about the motivation of this structure.

The Company explained to the community that the reason that they were doing the ICO this way so that all can contribute and we wouldn’t see something like the Brave ICO where it closed out in 30 seconds with whales taking the vast majority of the token immediately.  The one-hour open period would stop that from happening.

The original post can be found here:

Bancor Network ICO – Controversial One Hour Uncapped

There were many predictions as to how much Bancor would raise under this structure with participants in the forums saying over 100 million dollars.  Although this was possible, was it really achievable?  Well, they were not far off, as the ICO raised over $150,000,000.  As the sheer volume of transactions affected the whole network and there were many errors, Bancor extended to a three hour uncapped time period. Bancor made this statement:

“Due to overwhelming demand and traffic, and massive malicious attacks (details coming soon), many have not been able to get their transactions through, including us,” wrote Bancor on its blog. “We have decided to extend the minimum time to THREE HOURS in order to allow the Ethereum network to process all PENDING transactions and allow everyone who’s transactions have failed to RETRY. Our intention remains to include all early contributors.”

Bancor Controversy on the Web

www.IbtTimes reported:

“Several blockchain networks experienced cyber attacks and outages in the past week, including the Russian cryptocurrency exchange BTC-E, as cryptocurrency prices skyrocketed. CNBC reported Ethereum’s Ether tokens traded for around $400 each on Monday, up 5,000 percent since January. 

Tweets went out like this one from @Cryptonaire_com and the second one from @btcecom:

ATTENTION: Some exchanges are currently experiencing a severe DDOS attack. Please ensure the security & safe storage of your digital assets.

We are currently under ddos

The blockchain startup Bancor said in a statement Monday widespread outages were caused by “overwhelming demand and traffic, and massive malicious attacks.” However, the details of Bancor’s initial coin offering glitches are unclear. A reddit user argued avoidable technical issues, not hackers, could be the driving force behind network failures.

Either way, the hitches with Bancor’s ICO may have a silver lining. Because of it, they extended the window for investors to buy ICO tokens. Coindesk reported the Bancor ICO set a record by raising $153 million in Ether from around 10,885 buyers. Billionaire venture capitalist Tim Draper participated in the ICO and joined the Bancor advisory board, the startup’s blog said.”

Bancor Controversy From all Perspectives

Coindesk reported the following:

“Overall, 79,323,978 Bancor network tokens (BNTs) were created as part of the ICO, with the top token holders now possessing 83.96% of the tokens or 66,601,702 BNT. Fifty percent of the total tokens, or 39,661,989 BNT, were sold to the public, while the remaining 50% were allocated for future use.

The ICO attracted 10,885 buyers, according to available data, with more than 15,000 transactions sent to the address for purchases during the sale. One buyer went so far as to purchase 6.9m BNT, or roughly $27m, in the sale.”

This is the first of the issues, that the majority of the coins are held by a small percentage of the contributors.  It raises the question of where the control will be moving forward as their influence may be significant.

Bancor Controversy on BitcoinTalk

Sometimes the best gauge of an ICO is by seeing what the forum community is saying. Here are just a few quotes from BitcoinTalk and links to the threads whre you can read the full thread:

Serious issue concerning Bancor, get rid of all BNT:

“They collected pretty close to 400k ether. Essentially what they do, is keep .8*400k ETH = 320k ETH to themselves, and call the remaining 80k reserves. They will express this 80k in a different coin, called BNT. They assign 100 BNT to 1ETH that they received. That means it is 500BNT for every 1ETH in the reserves. Essentially, if everyone would want to convert their BNT back to ETH, they would get 1/500 ETH per BNT. Wait you say, in the white paper it says that the starting price of 100BNT will equal 1 ETH! This is true, this is where the mathematics uses a trick to hide what is going on. Their pricing formula, P=R/(S*F) ensures that the first BNT sold will be sold at a ‘fair’ value, namely equal to the amount of ETH you spent to buy it in the first place. After the first sell, things get worse rather quickly.”

So Bancor raised $144 million in less than 3 hours

@crytpohunter – “another insta ico scam.all insider whales selling to themselves will hoard it and pump the prices on exchanges. avoid.”

@gedor – “Don’t think that those people invest 144M in bancor because it is good. No they just want to double their money. It’s not an investment, you can easily sell your tokens after 2-3 days it is not like a real investment.”

@redhack – “This showed how weak Ethereum network. They locked all wallets and network by only 1 new ICO. MEW didn’t work, they broadcasted TX’s then delete it with no warning. Transactions can’t be reversible. 420k ETH moved in 3 hours and all network shut down. I wonder what will be Bancor exchange price after this hype.”

As you can see from just a few comments on the forum, the community is not happy with the results of the ICO, many thinking it was just a “money-grab”

Bancor Controversy and Ethereum Price

The real question to me is what do ICOs like Bancor do to the price of Ethereum.  The price has soared in the past few days alone.  What happens when pwople start selling off?  What if Bancor is a failure?  Will people lose confidence in the Ethereum Model?  Will it cause the Ethereum Coin’s price to fall.  All-in-all, there seems to be many concerns about the ICO and i suggest researching more to come to your own conclusion.





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