Today Lisk probably will announce that the crowdsale finished and about 15128.236124451 bitcoins raised. Do you believe this? Why should you believe? I’d like to consider this short post as an objective сriticism and recommendation for future actions but not as a claim that Lisk is any kind of scam.

Lisk Promise

I am one of those guys who was impressed what Crypti offer. I witnessed how guys struggled for their passion last 2 years. I truly believe that decentralized computation is a kind of markets with a lot of space outside Ethereum the same way I believe decentralized currency market is not only about Bitcoin. I am pretty sure that the model for decentralized applications that Lisk offer is very competitive, well designed and have a chance across huge community of Node.js developers.

The truth is that the Lisk model can be used on top of Ethereum, but Ethereum model cannot be applied for Lisk design. So the statement above is only about features both platforms offers right now.

Lisk Disappointment

Provable transparency for public projects is mandatory, not optional. Lisk founders decide to find an easier way. They are wrong. They choose personal comfort using Coinbase in exchange for convenience of more than 2000 people who trust them their money. They could use Copay. Hereby my lifetime recommendation to all potential investors:

Don’t put money in ICOs without Genesis Address

Ethereum did, BitShares did, MaidSafe did, Augur did. Do not think that you can outsmart things that already proved to work. We’ve got Voxelus. The question is: Do you want to be honoured and trusted like EthDev or appear suspicious and scammy like guys from Uphold?

Disclaimer: I’ve put a few in this crowdsale. But only because I personally trust Max Kordek. In case of better transparency I’d like to put significantly more.

I’ve had so much negative discussion internally with Konstantin Lomashuk concerning transparency of Lisk ICO funds. And he is definitely right.

Proof of Funds

Here is how Lisk Foundation prove it’s funds:

The right question: Does this a level of professionalism worth $6 mln of raised investments? Let me show how Proof-of-Funds should look like:

Here is an address where all raised money goes

1MGJy8cLSqaXLmK1R6Ph6NT2sXNkhMmrHE

Here is a signed message:

Hereby I claim that the address 1MGJy8cLSqaXLmK1R6Ph6NT2sXNkhMmrHE is under control of https://keybase.io/21xhipster PGP F69E43438E994ACC3819EE434EC744652CAA89D4

Here is a digtial signature:

G/BgYXVy3aJPs12iomSxeprygelr9kFtg+jZx7e8iTSbK51CslfIc//1yIOravvMl2N74vYo/B3lZEkOuH4gz/0=

You can easily verify it.

That is. Nothing more and nothing less. That should be industry best practise and we believe in that kind of future.

Underneath

Vitalik wrote very useful library: PyBitcoinTools. It can help.

Multisig address verification is a bit more complex but the principle remains the same.

Why?

Spendings can be controlled by community. That property is hard to overestimate.

No manipulation possibility from founders. One possible attack vector in case of video conformation: Founders during campaign can show money that was lent on Loanbase or BTCJam, from friends for some days almost for free.

Average Initial Price. That is important thing in term of initial Capitalization and future Compound Monthly Growth Rate that can be easily manipulated.

How that can be fixed?

Move funds to more transparent place than Coinbase. As a Lisk investor I trust guys from Lisk: Max Kordek, Olivier Beddows and I don’t trust Coinbase (sorry Brian Armstrong) as this company is (1) bound by obligations to US federal agencies and (2) scale a product that locks digital ownership rights of their users. Prove ownership of address using recommendations above or whatever. Publish spendings. We can offer a tool.

cyber•Fund Transparency Tool

We recently announced that now we support transparency features for 15 blockchain protocols. Here an example how this feature is used for transparency of cyber•Fund:

One of great use cases is using this tool for transparency of any blockchain based foundations. We believe Lisk can be a good example.

By the way, we offer a bounty for implementing balance autoupdate feature for Lisk: 500 CFUNDs.