# [[Ethereum]] Presale ## Whether Ether is a security https://prestonbyrne.com/2018/04/23/on-ethereum-security/amp/ by [[Preston Byrne]] on [[2018-04-23]] In my view, most of the Ether sold in the 2014 token pre-sale in exchange for Bitcoin may have been paid out to one person or, more likely, a handful of close associates working in concert. My reasons for believing this are anecdotal, but based mainly in [this chart](http://blog.cryptocrumb.com/2014/08/a-tale-of-two-bitcoin-presales-swarm.html) which shows the inflow of BTC to the Ethereum wallet address during the Ethereum pre-sale: ![[Pasted image 20220110014220.png]] Compare this to the curve for, say,  23y = x^7: ![[Pasted image 20220110014228.png]] Now compare it to a random Kickstarter… ![[Pasted image 20220110014155.png]] …Or the Tezos raise, which was 30 times the size of the Ethereum raise with what we should expect are many, many more contributors, thus offering an ostensibly much larger sample size: ![[Pasted image 20220110014242.png]] I could grab plenty more ICO fundraise charts but hopefully by now you’ve caught my drift: while ICO raises are sort of similar in that we usually see an initial rush of investors that gradually tapers off, with a little boost just before the sale ends, the initial two week-period of the Ethereum pre-sale looks more than merely typical, there’s very little randomness in it – it looks _perfect._ Seeing as human beings are generally _imperfect_, that’s what makes it a worthy candidate for forensic analysis. “Donations” from Eth-heads around the world not only flowed into the Ethereum Project’s wallet in great quantities, but they flowed in with the mathematical precision of a power function, 24 hours a day, 7 days a week, for two weeks straight. Notable too is the fact that ICOs tend to front-load contributions into the first days of the raise; Ethereum, by contrast, seemed to save the bulk of the contributions for later on. My preliminary conclusion is that human beings engaged in financial speculation do not usually behave in the manner the Ethereum chart appears to show. This is especially true when we consider that the Ethereum community was as small as it was back in 2014. If someone wants to science the daylights out of this and show how unlikely, given what we see with other ICOs, it is that the Ethereum pre-sale curve is the result of natural, random market conduct, by all means. The data’s all there on the blockchain. I’m thinking that, unless Vitalik subtly managed to telepathically hack everyone’s brains so buyers would participate in the pre-sale in an organized fashion, it would appear that a _lot_ of Ether – enough Ether to move markets or, if the system migrates to proof-of-stake, enough to play a meaningful role in determining consensus on a block-by-block basis – was sold to _not a lot_ of people. Depending on what those people then did (marketing? Other promotion?) this may be relevant for showing a common enterprise through _vertical_ commonality, which is a lot easier to demonstrate than _horizontal_ commonality. If the degree of influence is so significant that those holders can call the shots on consensus or market movements, well, that’s pretty significant for a securities analysis. Summing up, unless we can show that this Ether has been sold into the wider market, this chart lends itself to the proposition that Ethereum is not as decentralized as we might hope. If true, this fact likely has legal consequences and rather undermines the “Decentralisation Defence” being put to the regulators by industry lobbyists. ## Further analysis by [[Hasu]] https://medium.com/@hasufly/ethereum-presale-dynamics-revisited-c1b70ac38448 on [[2018-04-27]] ### Conclusion We set out to answer if there was inside-investing or other irregularities in the Ethereum presale. We looked at the rules of the presale and formulated strategies for all actors. The shape of the chart (as compared to other charts referenced by Preston) can be explained by these strategies. It’s hard to draw further conclusions from the dataset because, even though it is very rich, in the end we don’t know the identities behind the transactions. In particular very stable inflow of small transactions is still a mystery to me. If someone wants to dig deeper, I think looking for connections between the individual accounts that contributed would be the next logical step. ## 2022: New evidence surfaces showing [[Joe Lubin]] scheming to disguise large contributions https://twitter.com/Leerzeit/status/1479075881125617670?s=20 ETH Presale: "A person can buy unlimited Ether with pseudnonyms. We may limit the size of a single purchase to make it easier to disguise. So that no one is scared. If you plan to invest millions, you can give us an email, that makes it easier to create multiple fake identities" ### [Comments](https://twitter.com/prestonjbyrne/status/1480279783867039751) by [[Preston Byrne]] [[2022-01-09]] - My view for years has been that the Ethereum presale was mostly bought up by a handful of people working in concert. Here Joe Lubin discusses disguising mega whale purchases to make them look like a legit crowdfunding. - [Whether Ether is a security](https://www.google.com/amp/s/prestonbyrne.com/2018/04/23/on-ethereum-security/amp/) [pic.twitter.com/tYZAMXX3XZ](https://twitter.com/prestonjbyrne/status/1480279783867039751/photo/1) https://t.co/093ZhrlwmG - I mean, it should have been fucking obvious to anyone who looks at the crowdsale wallet but I guess people preferred to ignore that and swallow the Web3 propaganda whole. Web3 will come, but a Web3 worth the name will mostly be mined rather than issued - “‘Donations’ from Eth-heads around the world not only flowed into the Ethereum Project’s wallet in great quantities, but they flowed in with the mathematical precision of a power function, 24 hours a day, 7 days a week, for two weeks straight.” - [Whether Ether is a security](https://prestonbyrne.com/2018/04/23/on-ethereum-security/amp/) - If true, this means that much of Ethereum’s promise to decentralize the web is in fact a lie: it may instead be controlled by a group of elites whose existence has been purposefully concealed. - This also means that if Eth switches to proof of stake, the larger hodlers will have the power to determine consensus. - This is also true considering the only way you can run a full node is on Infura [twitter.com/itsjoeco/statu…](https://twitter.com/itsjoeco/status/1480289045913681924) - Notice me senpai [@adam3us](https://twitter.com/adam3us) [pic.twitter.com/CSNPOhNswp](https://twitter.com/prestonjbyrne/status/1480309085316825095/photo/1) - I’ll add that a spreadsheet exists with the names of everyone in crypto who was offered free presale Eth. I should know, my name is on it. - I turned the allocation down because my instincts told me sketchy stuff was going on and wanted to be a mile away from it when it blew up. - I know of a bunch of people in crypto who made a ton of money very quickly and wound up either irrelevant or dead, which is worse. [twitter.com/tobes888/statu…](https://twitter.com/tobes888/status/1480332278991515648) - [@KPTlaw](https://twitter.com/KPTlaw) Martin Shkreli learned that lesson the hard way