Ether Tokens Are Likely Securities (2016) - <AUTHOR> http://decentralizedlegal.com/ether-is-a-security/ <comment><USER2> So, follow-up question: are Team Fortress 2 hats securities? It arguably meets all four points: Valve gets money for releasing hats into the TF2 ecosystem, TF2 is a common enterprise, hat speculators expect to make a profit through simple capital appreciation, and the hat owners rely on the effort of Valve to develop TF2 for their profits.

<comment><USER3> In game digital assets is an interesting hypothetical. Whether or not it satisfies all the prongs of an investment contract analysis is less important than the overall size of the market. I think if blockchain tokens were doing daily vols similar to Team Fortress 2 hats, that the SEC would have never felt the need to comment. But that's just conjecture not anything you could hang your Team Fortress 2 hat on :)

<comment><USER4> MMORPGCoin coming to an ICO near you

<comment><USER5> Someone needs to make an ICO for WoW gold.

<comment><USER6> [https://neverdie.com/index.html](https://neverdie.com/index.html)

</comment></comment></comment></comment></comment><comment><USER7> The IRS still defines cryptocurrency as a "product", not a security. [1] It is to be treated as such in your taxes. I think that's the best indicator of the state of affairs. They provided detailed guidelines and answer many common questions 2014. [2] That may change but I'm pretty comfortable with not treating it as a security for the moment.

Also, since were treating it as a product, I view contributing to Ether based ICO's as not a sale of my "product" since the product is still the same, just tied to a smart contract. I see it the same as buying a physical product and then exchanging it for another physical product at the same store. I don't incur taxes when I exchange.

[1] [https://www.irs.gov/uac/newsroom/irs-virtual-currency- guidan...](https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidance)

[2] [https://www.irs.gov/pub/irs- drop/n-14-21.pdf](https://www.irs.gov/pub/irs-drop/n-14-21.pdf)

<comment><USER8> I think if you're offering your cryptocurrency/token in a crowdsale/ICO, then it should be seen as a security, because you're essentially offering people the opportunity to "invest" in your company's potential future.

<comment><USER9> I mean, maybe if the currency is pre-mined and you're buying a token from a seller. But what about Satoshi? Did Satoshi issue a security by releasing the blockchain? I mean, all he did was write a program and released it in the wild. That fact that other people decided to give value to his tokens doesn't mean he sold securities to the general public.

I think we need to reconsider from the ground up how securities should be regulated. There's been some promising rhetoric with the Jobs act but it seems like mostly talk with the SEC dragging their feet.

I remember explaining Reg-D to a progressive friend of mine. His initial reaction was that I'm making the law up, and there's no way the government actively prevents non rich people from early stage investing. We took a bet and I won. When I told him reg-d is backed by progressives then _all of a sudden_ he saw the value in it. Funny how that works.

<comment><USER10> The only way you could think that is if you also believe that patents on existing processes, but then add "On a computer" are new and novel things.

Just because something is using a blockchain does not mean it's new, or that what is happening doesn't fall under existing securities law.

<comment><USER9> You can't patent software so thanks for making my point. You can't patent math either. Crypto is math based money so now the SEC is basically trying to regulate math. Any reasoning person will see the futility in that.

Paradigm shifts require new rules. You can't regulate a car the same way you regulate a horse. But when we allow buggy whip manufacturers to influence regulators for the interest of their personal bottom line, then the public looses while the intrenched interests win.

[https://en.wikipedia.org/wiki/Red_flag_traffic_laws](https://en.wikipedia.org/wiki/Red_flag_traffic_laws)

<comment><USER10> Wrong on all counts. Software was patentable in the US. And there was a long, long time where there were a lot of patents whose only "innovation" was doing something on a computer.

"Crypto is math based money so now the SEC is basically trying to regulate math. Any reasoning person will see the futility in that."

Any reasoning person will know that what you said is not accurate in the least.

"Paradigm shifts require new rules"

This is NOT a paradigm shift. Literally you are arguing to go back to the days when software was patentable, and that "on a computer" should be all that's required to get a patent.

"You can't regulate a car the same way you regulate a horse."

No, but I can regulate what they are trying to do, which is provide transportation, the same. Likewise, these coins are not doing anything new. They are doing the exact same thing, just in a new package.

</comment></comment></comment></comment></comment></comment><comment><USER11> What else could they be other than securities? That's the purpose they serve.

From Investopedia: "A security is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation (via stock), a creditor relationship with a governmental body or a corporation (represented by owning that entity's bond), or rights to ownership as represented by an option."

That was the design of tokens from the beginning, and they were created for the purpose of being securities.

It should be no surprise that they're regulated as such.

<comment><USER12> Was Ether a security during the crowd sale? Yes.

Would it be a security in a future where the world runs on Ethereum and it is used to secure the decentralized network? No.

Is it a security today? That's complicated.

There is a lot of legal discussion in the token space about when the transition from security to commodity happens. Unfortunately the SEC provided no guidance on how it thinks about this question, but lots of people are working hard to figure it out.

</comment></comment><comment><USER13> Can we make a cryptocurrency that automatically only has value iff it is not declared a security by the SEC?

Whenever it is not declared a security, there is an expectation of profits, which would now qualify it as a security under the Howey Test. But if it is then declared a security, then there is no expectation of profits, which would subsequently disqualify it as a security under the Howey Test.

I really REALLY want to see this happen.

<comment><USER14> It likely wouldn't cause anything interesting to happen because real-world law doesn't work like "smart" contracts or computer code. You probably want to read this classic article for a good explanation:

[http://ansuz.sooke.bc.ca/entry/23](http://ansuz.sooke.bc.ca/entry/23)

</comment></comment><comment><USER15> I struggle with point number 4, "Did token holders rely on the efforts of others for their (expected) profits?".

It is the effort of (early) investors that make/made Ether out of their own work (mining) that creates the token supply and because Ether is needed in order to interact with Ethereum DApps, it's the demand for the token that makes it gain market value in exchanges. This seems to suggest that there is an effort on the part of the investor.

Many ICOs will simply state they are out of limits for US investors and again we see that regulators like democracy and capitalism but don't really want it to be accessible to _everyone_.

<comment><AUTHOR> That's what I thought. If I buy an Apple stock, I can't meaningfully contribute to the success of Apple (outside of investing more money). But if I was an early investor of ETH, I could build an Ethereum smart contract that is useful and thus provides value and thus makes the price of ETH go up as more people buy it to use my smart contract.

Would it be correct to say then that as long as there is at least 1 useful smart contract that the Ethereum Foundation does not solely control, ETH would fail prong 4?

<comment><USER16> The issue isn't whether you can hypothetically contribute to the potential security's value but rather is whether the success of the venture depends primarily on the efforts of others. There's a lot of grey area between being a regular Joe small shareholder in a massive publicly traded corporation (no participation) and being the sole owner and manager of a closely held corporation (clear participation). Its worth noting that commodity market fluctuations don't count as the efforts of others (e.g. Noa v. Key Futures where silver certificates weren't considered a security even when sold by an investment firm which marketing the certificates as investments).

There's a trend in the modern interpretation of Howey toward something called the "risk capital test," which states that a scheme which raises capital to finance a venture should be considered a security. I'm not sure Ether meets that test and it's a minority rule anyway but modern Howey jurisprudence is quite flexible because scam artists tend to be extremely inventive in getting around the Securities Act.

Ultimately the decisive factor in court is likely to be the unfortunately vague but essential standard "Do the investors in the scheme require the protection of the Securities Act of 1933?" The lack of a comparable regulatory system to protect the public against Ether scams counts against exclusion from the Securities Act. Otherwise, I personally think the case for Howey is weak here, but that's because the case law hasn't caught up to the tech yet. So we can't predict how a federal court might decide because they very well may revise the existing standards.

</comment></comment></comment><comment><USER17> Since the SEC investigative report concluded the DAO tokens were securities, one of the biggest questions is: are there any factual distinctions between the sale of DAO tokens and the sale of Ether.

I really can't understand why the SEC spent its time on the DAO seeing as the token purchasers essentially agreed by majority vote to null and void their purchase, meanwhile the Ether sale did in fact become binding.

</comment><comment><USER18> Very interesting, but SEC could have gone after Ethereum but explicitly did not and went after the DAO which was issued on top of Ethereum. My interpretation is that SEC doesn't think Ether is a security

</comment><comment><USER19> Its amazing the logical hoops people will jump through to defend their rights to invest in pyramid scams.

</comment><comment><USER20> The SEC notice also mentions buyers violating some Section 5. Does that mean that buyers are also at risk here for simply purchasing some tokens that were later found to be unregistered securities? That seems rather chilling.

<comment><USER3> I think the key language to focus on in the SEC notice is those "participants" who have a necessary role in the transaction of an unregistered offer and sale of securities are liable for violating Section 5 (page 16). Taken to the extreme, one could argue that even buyers of unregistered securities have a necessary role in the transaction but this is not the kind of activity relevant for Section 5 violations. Section 5 activity is more concerned with things like underwriting, offering, issuing, promoting, and soliciting the offer and sale of unregistered securities that lack a valid registration exemption.

<comment><USER20> Thank you for the response. Could you see this affecting sellers in secondary markets? Most that purchased DAO tokens likely went on to sell them in secondary markets. Would their role as a seller be applied to Section 5?

I think these are also important questions to consider. The valuation of a token is affected if you can't later sell it without commiting securities fraud. I really hope this is not the case.

</comment></comment></comment><comment><USER21> What about cryptocurrencies then that could as well be seen as crypto assets. Instead of launching a token on Ethereum they could launch a copy of Ethereum. Investors can buy "in" or use it to trade/pay. Premining is common and used to pay for building out the infrastructure of such a system. How can one gov entity power grab and be in charge of an entire global emerging technology. Something does not seem right in this picture.

</comment><comment><USER22> Ether tokens have a clear use-value. They don't provide holders with any passive income from profits earned by a common enterprise. I am not a lawyer, but in my opinion, the idea that they're securities is ridiculous.

This is a good analysis of how US securities laws relate to tokens:

[https://www.coinbase.com/legal/securities-law- framework.pdf](https://www.coinbase.com/legal/securities-law-framework.pdf)

<comment><AUTHOR> Something can be useful and a security, according to the SEC. They published an Investor Bulletin yesterday saying as much:

"A virtual currency is a digital representation of value that can be digitally traded and functions as a medium of exchange, unit of account, or store of value. Virtual tokens or coins may represent other rights as well. Accordingly, in certain cases, the tokens or coins will be securities and may not be lawfully sold without registration with the SEC or pursuant to an exemption from registration."

From: [https://www.investor.gov/additional-resources/news- alerts/al...](https://www.investor.gov/additional-resources/news- alerts/alerts-bulletins/investor-bulletin-initial-coin- offerings#.WXk2AVP3tsM.twitter)

<comment><USER22> Ether does not represent any "other rights" that would put it within the definition of a security.

</comment></comment></comment><comment><USER23> Is selling new Kanye West sneakers, yeezy's, a security? The resale price is usually 5x the retail price. I know there are some edge cases but how you market it can be the difference between illegal and legal. I think a problem with the DAO token, there was voting rights. A simple token coming off as a commodity should be safe

<comment><USER24> Neither of your points (price going up and voting rights) are what determines if something is a security. The article does a good job of running through what the law says makes something a security.

<comment><USER23> "proportional dispensation of voting rights are important indicators of common enterprise" same author

</comment></comment></comment><comment><USER25> [http://www.investopedia.com/terms/s/security.asp](http://www.investopedia.com/terms/s/security.asp)

"It represents an ownership position in a publicly-traded corporation (via stock), a creditor relationship with a governmental body or a corporation (represented by owning that entity's bond), or rights to ownership as represented by an option."

Stop it!

<comment><USER3> Can't stop won't stop :)

[https://www.sec.gov/about/laws/sa33.pdf](https://www.sec.gov/about/laws/sa33.pdf)

"The term ''security'' means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a ''security'', or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing."

<comment><USER25> quick thought experiment:

If I presell tickets to my music festival to a reseller who in turn profits in selling it to festival goers, you're basically saying my tickets were securities and need to be registered with the SEC. you see how crazy that sounds. :)

DAO tokens were obvious everything else is just a funny money commodity. Yes, some kid made a way to print your own money in under 30 secs. enjoy it!

<comment><USER26> I'm so torn. On one hand, I want you to be right, but on the other hand I would love to see the likes of Ticketmaster and StubHub going down in flames at the hands of the SEC.

</comment></comment></comment></comment><comment><USER27> By this criteria, wouldn't this make art of an artist (fractional ownership) sold by an art dealer a security and therefore subject to SEC registration? Basically tokens are a security because the SEC says so. I haven't seen a good explanation otherwise.

<comment><AUTHOR> IANAL but I'd assume it is hard to argue that there is a common expectation of profit when purchasing art, even though this is why _some_ people buy art. Furthermore, the profits you would make upon reselling the piece of art are not coming solely from the artist's efforts. The artist got paid for their efforts and your profits are coming from your ability to market the piece and negotiate a better deal. In other words, you have some control over how much profits you gain and the artist is out of the picture (ie. they are no longer spending effort to help you make profit).

But a securities law expert would have a better explanation</comment></comment>


Huawei staff CVs reveal alleged links to Chinese intelligence agencies - <AUTHOR> https://twitter.com/BaldingsWorld/status/1147259303268454400 <comment><USER2> So this research is based on a subset of 590 million or more CVs that were leaked by Chinese recruitment platforms. The author uses keywords like "华为", "Huawei", "People's Liberation Army" and "PLA" to identify people who worked for multiple institutions.

That seems like a great dataset for some statistical analysis, but unfortunately we aren't even told how large the subsets are. (The figure of 590 million is from a news report about the leak.) So it's hard to tell how large the problem is, and how it compares to other companies or countries.

The results are presented as three profiles based on three CVs from the leak, but edited to obscure their identity. It's only mentioned in the conclusion that the profiles are actually composites, which I take to mean that they combine information from multiple CVs each. That's unfortunate, because many of the claims rely on one and the same person being involved in multiple activities. We'll have to trust the author that those modifications do not embellish anything.

The three profiles are:

1\. A software engineer in Huawei QA since 2011 who from 2012 on also held a research and teaching position with the PLA's National University of Defense Technology, working on signals, remote management and scripting. The paper claims that this places them within a branch of the Strategic Support Forces (who are responsible e.g. for cyber warfare). It's not clear to me whether that's something specific to that person, or whether any similar research at NUDT is classed that way. NUDT also does civilian research, e.g. Microsoft was criticized for publishing a paper on beauty estimation co-authored with NUDT researchers: [https://ecommons.udayton.edu/cgi/viewcontent.cgi?article=107...](https://ecommons.udayton.edu/cgi/viewcontent.cgi?article=1077&context=cps_fac_pub)

2\. A Huawei engineer who was responsible for building lawful interception capabilities, working on roll-outs in multiple countries. He served as a representative for the Chinese Ministry of State Security on one project "likely guaranteeing project specifications". The author tries to imply that this was to grant the MSS access to other countries' networks, but alternatively Huawei simply has product managers responsible for communication with the law enforcement agencies doing the intercepting in their _own_ country's networks. The author also tries to link that person to a "backdoor" in infrastructure of Vodafone Italy. However, Vodafone has denied the allegiations in the Bloomberg article he cites: [https://www.bbc.com/news/business-48103430](https://www.bbc.com/news/business-48103430)

3\. A network engineer who developed civilian and high-security military communication systems at CASTC, then worked at China Unicom for a year and then went to Huawei to lead network expansion projects. At CASTC, he gained expertise using Cisco and Nortel switches. The author construes this to imply that he assisted in espionage attempts involving fake Cisco routers.

Of the three, I'm going to classify 1. as harmless research (otherwise Microsoft is just as implicated as Huawei) and 3. as "person with security clearance changes jobs". 2. however at least supports this part of the paper's conclusion: "the institutional relationship between Huawei and Chinese state security services directly contradicts Huawei claims that they have no relationship with these services." Huawei should probably clarify those statements to mean that the relationship doesn't grant Chinese security services access to other countries' data.

<comment><USER3> > denied the allegiations in the Bloomberg article

There's that name again. Once is an accident. Twice is a coincidence. How many times has Bloomberg published an article that they can't back up?

</comment></comment><comment><USER4> A lot of people in this thread are complaining that the US does this to but does anyone seriously believe that having Huawei tech embedded in American infrastructure is a good idea?

<comment><USER5> Yes, I do. Here's a few reasons:

\- I genuinely think that the Huawei stories are by and large protectionist fearmongering and that Huawei products would win in a free and high- information (and high-correct-information, of course) market. I think better, cheaper products are good for the US.

\- If Huawei is actually using their products to spy, or there is even a belief of such, that incentivizes the use of end-to-end secure protocols that don't trust routers, open-source and verifiable devices for end users, etc. If it's just the US government, there's a strong pressure on US companies not to treat their own government as an adversary, which creates the danger that it's easy for the government to become an adversary (even if they are not today, it can change hands quickly).

\- I don't think China is any more evil than the US. So if I'm okay with using infrastructure from AT&T and its Room 641A, Verizon and its Quantico circuit, and the various PRISM companies, I have no logical reason to object to infrastructure that may be similarly compromised by the Chinese government.

<comment><USER6> > I don't think China is any more evil than the US. So if I'm okay with using > infrastructure from AT&T and its Room 641A, Verizon and its Quantico > circuit, and the various PRISM companies, I have no logical reason to object > to infrastructure that may be similarly compromised by the Chinese > government.

One big problem is that there is no recourse against China. Unless you have some long term plans of joining their politburo and making changes 25 years from now, there's no way to way to apply direct pressure for change.

Say what you want about the USA's intelligence organizations but at the end of the day there's a path for change. We elect a new top of the house every four years and all our intelligence agencies ( _are supposed to..._ ) report to our civilian leaders. China's is a black box that's only getting darker over time.

<comment><USER7> What path? The NSA was found to be breaking the constitution, and as far as we know hasn't stopped.

<comment><USER8> > _What path?_

Through legislation and free deliberation.

> _The NSA was found to be breaking the constitution_

No, it hasn't. Many believe it is, but the courts have so far upheld the NSA's activities.

The American public's views on the topic are mixed [1]. The fight is in convincing the public this is an issue.

[1] [https://www.pewresearch.org/fact-tank/2015/05/29/what- americ...](https://www.pewresearch.org/fact-tank/2015/05/29/what-americans- think-about-nsa-surveillance-national-security-and-privacy/)

<comment><USER9> [https://www.nbcnews.com/news/us-news/federal-judge-says- nsa-...](https://www.nbcnews.com/news/us-news/federal-judge-says-nsa-program- appears-violate-constitution-flna2D11751613)

[https://digitalcommons.law.yale.edu/yjolt/vol11/iss1/8/](https://digitalcommons.law.yale.edu/yjolt/vol11/iss1/8/)

The evidence suggests that blanket surveillance is a thing, and that's it _very clearly_ unconstitutional.

Of course in this situation it's always possible to appeal to "national security" but that's an unconvincing legitimisation unless it can be proved that national security has been enhanced to an extent that warrants the suspension of constitutional protections.

So far as I know this has never even been tried in court, never mind proven.

<comment><USER8> It's shown up in court, but defendants have had a tough time showing legal standing [1]. Keep in mind that the state secrets privilege [2] is judicially mediated. Given the lack of demonstrable, specific harm, the matter is-- rightly, in my opinion--deferred to the political branches as a political question (as opposed to a legal one).

That said, let's keep in mind context. Here we have a government program which we're able to freely debate. If enough of us prioritized its removal, it would be outlawed. That functions as a fundamental check totally lacking in China, moreso now that Xi is a dictator.

[1] [https://en.wikipedia.org/wiki/Jewel_v._NSA](https://en.wikipedia.org/wiki/Jewel_v._NSA)

[2] [https://en.wikipedia.org/wiki/State_secrets_privilege](https://en.wikipedia.org/wiki/State_secrets_privilege)

<comment><USER7> > Given the lack of demonstrable, specific harm, the matter is--rightly, in my > opinion--deferred to the political branches as a political question (as > opposed to a legal one).

I'm not sure how it can be relegated completely to political representatives, given that the secreacy means that the check on representative desicions (an informed populace voting for their representatives) isn't present.

> That said, let's keep in mind context. Here we have a government program > which we're able to freely debate. If enough of us prioritized its removal, > it would be outlawed.

You can freely debate specific policies in China, and broadly unpopular policies in China are suspended.

That can't be said for the US, where whether a law is passed has more to do with whether the ruling class supports it, rather than it's broad popularity.

[https://scholar.princeton.edu/sites/default/files/mgilens/fi...](https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf)

> That functions as a fundamental check totally lacking in China, moreso now > that Xi is a dictator.

The whole 'Xi is a dictator' thing is severely overblown in Western media. Oh no, he has the same term limits as Angela Merkel now. Literally a dictator.

PS: linking to the states secrets wikipage to increase your number of citations is lol inducing.

<comment><USER10> You understand that Angela Merkel is subject to free and fair elections, which Xi is not, right?

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER11> Tons of former NSA persons work in the US private sector,especially within infosec.

<comment><USER12> The keyword here is "former". In the Huawei scenario, a lot of them seem to be active intelligence officials, not former ones.

<comment><USER13> How do we know that "former" is not just on paperwork?

When I hear the arguments against China and their tech companies, I don't have a problem believing them, however I do not expect anything less from the USA.

Remember Snowden? I'm simply assuming that Facebook, Google, Apple, Cisco or any other US tech company are tapped by the US 3 letter agencies. There were some reveleations on that(PRISMA) but it's probably just tip of the iceberg.

And now the Chinese. So what?

<comment><USER14> I think the big difference is that US companies can meaningfully resist the US government if they choose to, and they often do. Chinese companies cannot.

<comment><USER5> The way that Qwest CEO Joseph Nacchio so meaningfully resisted the government that he was convicted of insider trading for telling people his company would be successful when it actually relied on a government contract that was pulled in retaliation, which he couldn't use as a defense in court because of national security concerns? For which he served four years in prison, and Qwest no longer exists? That sort of meaningfully resist?

The message to me from that case is clear—if the US government tells you to jump, you answer, how high.

<comment><USER15> You had to go back 12 years for your example. I think that speaks pretty loudly to the differences between countries.

<comment><USER5> Correct, it's been twelve years. Nacchio was the most recent person stupid enough to say no to the US government. They made an example of him. In recent years, US telecom CEOs know they should quietly say yes, and not put up a fight.

<comment> the-dude Hmmm, didn't Apple through Tim Cook resist the US government regarding the unlocking of iPhone's?

<comment><USER16> No, this is totally different.

There is no reason to believe that the NSA doesn't have the ability to access iPhones [0]. Either through explicit help from Apple or otherwise.

Tim Cook's stance was within the fiction of constitutional order. The FBI wanted to pretend that they couldn't access the phone and bully Apple to give them access. This is to:

1\. Legitimize their own access 2\. Be able to, more easily, use the courts to punish someone (instead of droning a foreigner)

That last one is important. The DEA is known to use (unconstitutional) parallel construction to prosecute drug smugglers. If they have legitimate access to your phone, it's easier to pretend that they obtained their evidence legitimately.

Tim Cook also has an interest in maintaining the aura that iPhones protect your safety. There's no reason for you to believe that w/out having the source.

[0] or do you believe that no one working on the iPhone has secrets that the NSA can't leverage? Or that the richest security service can't manufacture custom chips as needed to clone the devices SSD? Or hasn't capped the chips in the iPhone already? Or run it through the most through fuzzer?

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER17> It seems that many of the commenters here forgot about the arrest of Huawei Poland's sales director suspected of spying: [https://www.bbc.com/news/world- europe-46851777](https://www.bbc.com/news/world-europe-46851777)

<comment><USER5> What is a Western country arresting (and not even yet successfully prosecuting) a Huawei employee supposed to prove, besides that the West is suspicious of Huawei?

</comment></comment><comment><USER18> It's sad to see these threads get quickly out of hand with emotions getting the best of some of the HN audience. I have been commenting from time to time in these threads, but it seems impossible at times to have rational discussion. I don't really feel strongly about China one way or the another, I just know they do not always uphold the same values as I do. (And so do many other things)

Anyway, I think it's important to look at this issue as a whole from also the viewpoint of the Chinese - to understand how the Chinese society works and why there is such strong emotional response when people start accusing China. Because I don't really have first-hand experience, I found these very interesting videos that I think are enlightening:

serpentza - How China stops Overseas Students Integrating

[https://www.youtube.com/watch?v=-uXreGimP-o](https://www.youtube.com/watch?v=-uXreGimP-o)

serpentza - China NEEDS an ENEMY to Survive!

[https://www.youtube.com/watch?v=jg2fUGBQDMQ](https://www.youtube.com/watch?v=jg2fUGBQDMQ)

The author who is from South-Africa has been living in China for some time, and how he describes his life there is quite illuminating. In short: China seems to have mastered how to create an "us vs them" culture and blatantly aggravates their citizens to move their focus away from their internal problems. Well, I know it's a little bit tangential, but I thought it was quite interesting.

<comment><USER2> A single person's opinion won't help you much in understanding "the Chinese viewpoint". To counter it with another opinion, I don't think the citizens of any country can be said to have a unified viewpoint. Chinese people are just as capable of having nuanced opinions on political issues and disagreeing with each other as everyone else.

Additionally, you can't just assume that emotional reactions to accusations leveled against China are all due to Chinese posters with an "us vs them" mentality. When I see accusations that are exaggerated, get the details wrong or are made up from whole cloth, I am prone to react similarly. Of course I feel the same about official party propaganda, but that doesn't tend to get posted to HN.

</comment></comment><comment><USER19> Can someone share the cited research? Twitter appears to be blocking Tor these days - what a disappointment:

> 403 Forbidden: The server understood the request, but is refusing to fulfill > it.

<comment><USER20> Twitter has also been refusing to load tweets in Firefox for Android (on T-Mobile USA), instead showing "Please wait to refresh". Its like they think I'm DDoSing their infra, rather than trying to view a tweet every few days...

<comment><USER21> Same here, firefox android with disabled cookies

They put me on rate limiter

Same for logged of chrome on android

But if I login then everything is fine.

I stopped using Twitter that very day

</comment></comment></comment><comment><USER22> Arguing about which nation is spying on you better is like arguing about which cancer causing carcinogen is better for you. It all sucks and isn't going away anytime soon.

China will spy on you just as much as USA/Russia/UK/Israel/ad nauseum... if given the chance. So enjoy staring at your shiney tech and remember that any number of nation states are most likely staring back at you. Enjoy modern life.

</comment><comment><USER23> My personal opinion is that I'm not at all surprised by this. The Chinese government is a one-party rule that controls all aspects of life. Criticize the government or the party there and you're gone. They would be foolish, with the things they're known to do, to not take advantage of such big opportunity to spy on many countries. I think it's very reasonable for western democracies to be careful before embedding Chinese (or any other authoritarian country) high tech in their infrastructure.

</comment><comment><USER24> This is such bullshit. Head of an American online travel company based in Bangkok is Ex-CIA. Large rest of the C-suite is all Israeli Defence Forces. So now what?

</comment><comment><USER25> So if a Chinese telecom wants to do business globally, it has to exclude all CCP members and avoid state intelligence personals all together?

<comment><USER26> That seems like a good way to build trust with citizens outside of China. I believe that a wide portion of people in Western Europe and the US are distrustful of the Chinese government so excluding those individuals is a positive.

<comment><USER27> Someone should tell this to MongoDB which took funding from CIA.

<comment><USER28> I'd think Palantir would make for a better example. Simply look at anything that InQTel has funded.

[https://www.crunchbase.com/organization/in-q- tel](https://www.crunchbase.com/organization/in-q-tel)

</comment></comment></comment></comment><comment> user00012-ab I find it hard to take anyone seriously who posts their "breaking research" as a series of tweets; find the correct platform that fits your message; if you are a 10 year old girl, then a series of tweets might be fine.

<comment><USER29> If you have a lot of followers, twitter can be a very effective loudspeaker even with the character limit. By the way, 10 year olds don't tend to use twitter — boys or girls (why is it so often young girls who are held up as a negative example?)

</comment></comment><comment><USER30> so the take is do not have a job before working for Huawei. If there is someone working for American company before joining Huawei, American government is linked to Huawei :D

<comment><USER31> The take is to not simultaneously be employed by the Chinese government and Huawei.

</comment></comment><comment><USER32> Also, there are large numbers of people in companies like huawei and cisco working on clandestine eavesdropping and "interception" is a public feature of the products. These people have to have close ties with users of the features.

</comment><comment><USER33> wild - this thread appears to be brigaded by pro CCP posters

<comment><USER34> This comment breaks the site guidelines. Would you please review [https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html) and follow them when posting here?

When people's views are divided, internet readers are a million times too quick to assume that the other side is brigading, shilling, spying, astroturfing, promoting secret agendas, fifth-columning, foreign-agenting, or (this seems to be the latest favorite word) disingenuous—even when they have zero basis for thinking so. (Someone representing an opposing view is no basis for thinking so.) This is a cognitive bias. It leads people to imagine nefariousness and project it onto other users. That poisons the community—and this poison is actually the bigger problem by far. We've even seen individual users singled out for attack merely for a different point of view. In the limit case it converges on mob behavior.

Therefore all HN users are expected to have the self-restraint to rein in this impulse, most of all on paranoia-prone topics like spies hiding things in technology, nations planting foreign agents, and all the rest of this. Yes, these are things; and internet commenters imagining them is also a thing.

Here are a few of the other explanations I've posted about this.

[https://news.ycombinator.com/item?id=20239719](https://news.ycombinator.com/item?id=20239719)

[https://news.ycombinator.com/item?id=20199254](https://news.ycombinator.com/item?id=20199254)

[https://news.ycombinator.com/item?id=19862158](https://news.ycombinator.com/item?id=19862158)

[https://news.ycombinator.com/item?id=19404162](https://news.ycombinator.com/item?id=19404162)

[https://news.ycombinator.com/item?id=19402447](https://news.ycombinator.com/item?id=19402447)

[https://news.ycombinator.com/item?id=16632589](https://news.ycombinator.com/item?id=16632589)

[https://news.ycombinator.com/item?id=16532039](https://news.ycombinator.com/item?id=16532039)

[https://hn.algolia.com/?query=by:dang%20astroturfing&sort=by...](https://hn.algolia.com/?query=by:dang%20astroturfing&sort=byDate&dateRange=all&type=comment&storyText=false&prefix=false&page=0)

<comment><USER35> It's really not. If you spent 10 minutes on HN Algolia and looked through all threads that reference China in the title (e.g. [https://hn.algolia.com/?query=china&sort=byPopularity&prefix...](https://hn.algolia.com/?query=china&sort=byPopularity&prefix&page=0&dateRange=pastMonth&type=story)), and then visited the comment section of any thread that had no relation to USA (e.g. "WeChat is Watching: Living in China with the app that knows everything about me", "Report on forced organ harvesting in China", etc.) then you'll _always_ find Chinese nationalists/shills resorting to US whataboutism.. You can try to do the same with any other country, and you won't see this trend.

It's also very common for threads that are negative towards China to quickly disappear from the frontpage for no reason despite just recently appearing, or even being at the first position. An example from a few days ago: [https://news.ycombinator.com/item?id=20336543](https://news.ycombinator.com/item?id=20336543). I really don't understand how you can deny this.

<comment><USER34> > _you 'll always find Chinese nationalists/shills resorting to US > whataboutism_

You've broken the site guidelines again with this. That's not cool. I'm not sure what to do besides repeat the explanation and links I just gave you.

> _You can try to do the same with any other country, and you won 't see this > trend_

Of course. That's the geopolitical battle of the moment. It was the same with Russia a year ago. All this shows is what controversy is hot right now.

> _It 's also very common for threads that are negative towards China to > quickly disappear from the frontpage_

Moderators routinely downweight hot controversies and political battles, as well as articles that repeat what has already been discussed recently. If we didn't, the front page would consist of nothing but that. Your mistake is in jumping to the conclusion that this has anything to do with our own political views or some secret bias about China. It does not. Our job is to protect HN from (a) mind-numbing repetition, and (b) earth-scorching flamewars. Why? Because those things kill intellectual curiosity, which is the point of this site. Everything we do as mods follows from that principle.

By the way, that last bit can be inverted to get a reliable test for moderator action on HN. If moderators do X, can you find a path from the principle of intellectual curiosity to X? If so, that's probably why we did it. If not, you can always ask us what the path is. We're happy to answer questions, but (again) as the guidelines say, it's better to send them to firstname.lastname@example.com.

<comment><USER35> Could you clarify one thing: if a thread has already reached the frontpage (and is in a position where it should only continue to gain popularity rather than disappear, e.g. 50 upvotes in 20 minutes), does mass flagging the thread have any influence on its score? Because from outside observations it surely seems like it does, especially when you take into consideration that I've on several occasions seen a thread get knocked out, only for a moderator to push the thread back to the frontpage again.

I would also argue that by allowing users to resort to US whataboutism then these comments break multiple rules by introducing flamewars and engaging in political battles.. which, in my opinion, result in you failing to prevent (a) mind-numbing repetition, and (b) earth-scorching flamewars.

I'm also very curious about the logic behind down-weighting this thread: [https://news.ycombinator.com/item?id=20336543](https://news.ycombinator.com/item?id=20336543). In my opinion, it's very high quality journalism, with two journalists risking their lives to give unprecedented access to a region that's been technologically cut off from the rest of the world. I also believe it's the first time we saw what China did to the children of the families that had been sent to the camps.

<comment><USER34> Normally I'm happy to answer questions like this. But when you repeat the exact provocation that I just asked you twice to omit from your HN comments, my trust that you're asking in good faith goes away.

It's unfortunately common for some users to question HN moderation as a way of challenging the mods to political or ideological duels. Our experience with that is that no matter how patiently one answers, every answer is met with a flurry of new questions, because the purpose is not to learn but to fight. This is risky for us—it amounts to a DoS attack on the site, quickly exhausting our time and energy, stealing resources from other users and from work we might do to improve HN for everybody.

I'd be delighted to be wrong, but your comment seems to signal that you don't want to use HN as intended, which includes respecting the way it is currently moderated. So first I need a reason to believe that you actually do want that, and then I'll be happy to answer whatever you like.

<comment><USER35> If you feel my tone was aggressive, condescending or negative in other ways then I'm sorry.

I think it's an unfair interpretation to believe that I don't want to use HN as intended, I'm just tired of seeing every thread that's critical of China head down the same path. You said:

> That is not at all an accurate description. This is a classic example of how > people feel like the site is biased against their point of view even when > it's the dominant one.

The US whataboutism is undeniable, you also acknowledged it yourself, while highlighting the same thing happened with Russian threads. I think it's naive to believe that "all this shows is what controversy is hot right now". Because it's a common and effective tactic that occur on all social media, and in threads that aren't related to China/Russia, everyone usually seem to be able to behave and stay on-topic.

As for mass flagging and quick downvotes, I can only make assumptions based on personal experience and careful observations (been using HN for over half a decade and tend to refresh the site every few minutes). You seem to blame/credit moderators for causing the threads to disappear, whereas I was under the impression it was often caused by mass flagging.. so I'm genuinely curious if flagging a thread has any effect on its position, or if it simply alert a moderator to take a closer look.

<comment><USER34> Yes, flagging affects a submission's rank. So do moderation penalties and various software penalties. User flags are usually the main reason.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER36> However with the same logic you can pretty much prove none if the big companies in the world is independent.

<comment><USER37> It gets especially funny for any company hiring Israeli security experts. Or even the US for that matter, college is expensive and there seems to be an array of people who get their degree financed that way.

<comment><USER33> but in the US they usually aren't simultaneously employed

</comment></comment></comment><comment><USER38> It is clear from the author other tweets, that he is on a mission..

</comment><comment><USER39> So how long do you think he'll last until he magically disappears?

<comment><USER40> Who? You mean Author working for American Literary Historical Society in New York City?</comment></comment>


Da Vinci – Overrated? - <AUTHOR> https://www.bedelstein.com/post/da-vinci <comment><USER2> This reads almost as a parody of tech entrepreneurship and the modern age. Steve Jobs is more praiseworthy than da Vinci, because he "shipped" products for the consumer market, as compared to da Vinci, who was more interested in artistic and scientific knowledge for its own sake? Is this legitimately what the author thinks?

The post is also wrong/misinformed on a number of things. Da Vinci _did_ intend to build a number of his plans, but was thwarted by the fact that he lived in conflict-ridden Renaissance Italy. For example, his design for a gigantic bronze horse never became a reality as his patron used the bronze for making cannons.

[https://en.wikipedia.org/wiki/Leonardo%27s_horse](https://en.wikipedia.org/wiki/Leonardo%27s_horse)

<comment><USER3> Yeah, it's not like we have Steve Jobs' notebooks to be able to know and compare all of the projects he worked on that never saw the light of day. Apple is notoriously a very secretive company. We often don't find out about canned projects until a decade later.

Nobody ships everything they work on. This is a creators' myth that I don't know why keeps getting perpetuated.

<comment><USER2> I think the entire argument is absurd. Da Vinci _did_ ship - he created hundreds of artworks and by any measure (other than money) achieved more than Jobs - and I say that as a fan of Steve Jobs.

<comment><USER3> Agreed completely. The proof is in the pudding. Da Vinci _has_ had a massively lasting impact on human culture. 500 years later, we still talk about him.

</comment></comment></comment></comment><comment><USER4> Comparing Steve Jobs to Da Vinci? There is no appropriate comparison here. You think Da Vinci should have 'shipped more'? So often people think they can pick and choose characteristics, why can't you be more like this, or that, or sure Micheal Jordan was good, but he would have been better if he was nice. It's the naive, arrogant picking apart of things that we just don't understand and it stunts our understanding of things. Try and learn from great artists maybe rather than believing we have some insight into how they could have been 'better', more 'productive'. I'm completely baffled at the idea that Da Vinci didn't contribute as much as he should or could have.

</comment><comment><USER5> He left a lot of inventions in the design phase, but the truth is da Vinci shipped more than most of us ever will.

Some of his inventions couldn't be built during his time either, so it wasn't simply that he always lost interest. Seems a bit unfair to mention design flaws but not point out that he was designing machines that required materials that didn't exist yet.

</comment><comment><USER6> It reads like a parody to be honest. I'm hoping it is one.

Of particular interest is the author's equivocation of Jobs' Reality Distortion Field. The author makes it seem as if it was Jobs' ability to distort the world to create something unexpected, but most of us use the term to describe how Jobs could make people believe all sorts of dumb things while in his presence (and the effect wore off when not in his presence, when people realized these things were indeed dumb). It's not a positive thing.

</comment><comment><USER7> Leonardo did "ship" some of the greatest works of art. Some of those paintings took decades to complete. Which you happily glanced over.

Comparing steve jobs to Leonardo is a discredit to both steve jobs and leonardo.

</comment><comment><USER8> A most sacrilegious article by a clueless author :-) This silliness where people just parrot platitudes like "execution", "implementation" without really understanding what it means is the bane of all Creativity.

The mark of a _Genius_ is an insatiable curiosity about a wide variety of subjects and the willingness to jump into every one of them without regard to other people's expectations. Da vinci was unparalleled in that respect. The breadth of his interests is what makes him so great. Execution is always limited by circumstances like political climate, patrons, resources etc. Given the uncertain times that Da vinci lived through, it is an absolute miracle that he was able to do as much as he did. To dismiss it all by using platitudes like "Real artists/engineers" ship" is the height of ignorance and hubris.

Further reading:

* The Notebooks of Leonardo Da Vinci, Vols I & II (Dover publications)

* Leonardo on the Human Body (Dover publications)

* Leonardo, The Complete Paintings and Drawings by Frank Zollner (Taschen Publications). This is a huge book but worth every penny. I believe it was later republished in multiple volumes due to its size.

</comment><comment><USER9> I read the post and appreciate the perspective but disagree so strongly with this that cannot pass without leaving a comment.

Claiming da Vinci is overrated to Jobs because Jobs shipped more is on the same bar as saying Beethoven is overrated because his music is not suitable for a disco club and is less profitable.

</comment><comment><USER10> I am regularly seeing Steve Jobs described as a genius both in posts and comments on HN. I am always genuinely wondering: what is this based on? From my perspective, Jobs had an amazing talent for motivating people, and for selling both himself and his product in a cult-like way. But a _genius_?

> Leonardo had no trouble distorting reality either, the only difference is > that Jobs could actually make these ideas happen.

What ideas exactly? Selling computers Steve Wozniak designed? Releasing an MP3 player that looked better than previous ones? Removing smartphone keyboards?

<comment><USER8> Exactly! The word _genius_ has lost its real meaning.

</comment></comment><comment><USER11> What I always learned about Da Vinci was that he was a pacifist. He was employed as a "military engineer" but he saw himself more as a scientist [1]. It's also debatable if those "errors" were left on purpose to prevent his work for being copied or it where real errors.

[1] [https://theconversation.com/four-ways-in-which-leonardo- da-v...](https://theconversation.com/four-ways-in-which-leonardo-da-vinci-was- ahead-of-his-time-115338)

</comment><comment><USER12> I agree with others who disagree with the post. It's true that both Leonardo and Jobs were visionaries and it's true that Leonardo lost interest quickly (I guess that's because he was curious about so many different things) but there's a very big difference between the two: Leonardo was inventing, designing and eventually building his own things, Steve Jobs had hundreds of highly talented engineers for that.

</comment><comment><USER13> I think this might be a misunderstanding of who both of these people were.

Steve Jobs was an engineer. He saw 10 years into the future and made it happen.

I prefer to think of Da Vinci as a proto sci-fi artist. It'd be like calling Jules Verne a hack for not actually making his time machine...

</comment><comment><USER14> I so strongly disagree.

Years ago, alone of my consulting customers sent me a 40 pound giant book of Da Vinci's notes, art, inventions, etc. Amazing corpus of intellectual curiosity and exploration, not to mention all the great art.

<comment><USER8> Can you please share the name of the book?

<comment><USER14> I gave the book away three years ago (after enjoying it for years), so I am not 100% sure of the title, but I think it was the hardcover edition of "Leonardo da Vinci: The Complete Paintings"

</comment></comment></comment><comment><USER15> I think the idea of "shipping" in this context is misplaced. "Shipping", as used colloquially, means to send a product to market, which is not the point of art. Artists create. Businesses ship.

</comment><comment> deep-root I regretfully clicked on this click bait... Are non-advertising interstitials on mobile becoming a thing? It feel unnatural to have the page loaded but locked for a few seconds.

</comment><comment> P-NP Many don't believe that the rather unimpressive 'Salvator Mundi' was painted by Leonardo. Nevertheless, it sold for 450 million bucks. His most famous paintings such as the Mona Lisa might bring hundreds of billions if they were on the market. Probably more than what Steve Jobs ever owned. So much for 'shipping products to the consumer market.'

</comment><comment><USER16> As an artist and idea generator, he is virtually peerless. As a product creator and businessman, his performance isn't impressive.

Is he _overrated_? It depends on what you value and how you're keeping score.

<comment><USER17> How many businessmen do you know that have been summoned by very powerful people to help fix their country's problems?

To Da Vinci it happened several times, he spoke and had relations with some of the most powerful people of his time: Medici, Sforza, Borgia, Francis I (king of France) and for each one of them he designed and often built infrastructures for their cities.

Even the Sultan of the ottoman empire Bayezid II asked Leonardo to design a bridge for him, in 1502

It would have been the longest bridge in the world at the times, MIT tests proved his project was solid and centuries ahead of times, in 2011 Norway built a bridge based on that design and Instanbul Is thinking about it as well.

So, all in all, he wasn't so bad at doing business.

<comment><USER16> It would have been better had I said his performance isn't _as_ impressive.

Whether he had business acumen wasn't really my point. But it's obvious his business acumen isn't his legacy. His amazing art, brilliant ideas, and diversity of ideas is his legacy.

</comment></comment></comment><comment><USER18> I think OPs goal was to evoke reaction to his post On HN and looks like he was pretty successful at that.

</comment><comment><USER19> If this is not peak tech bubble, then I don't know what it is.

</comment><comment> the-dude [https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...](https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines)

So, no.</comment>


Show HN: Hackero – Hacker News client on speed. Less than 500kb to get your news - <AUTHOR> https://hackero.co <comment><USER2> Well it is 609.41 KB / 506.33 KB transferred and like 395kb of them are a font, good use of caching as well, not bad

<comment><AUTHOR> Now with gzip switched on it should even be less :D</comment></comment>


Google provides tools for developers to analyze their website for best practices - <AUTHOR> https://github.com/GoogleChrome/lighthouse <comment><AUTHOR> Just a reminder since this project keeps growing and more features being added. Lighthouse is a Google project built into Chrome that helps developers analyze websites and see performance metrics to improve their websites for best practices.</comment>


Introducing Multi-Leg Options Strategies - <AUTHOR> http://blog.robinhood.com/news/2018/6/12/introducing-multi-leg-options-strategies <comment><USER2> From any options theory class you'll learn that you can create any complex position you want with options. If you want to synthetically create a future just buy a put and call at the same strike price, etc.

And all of this is really interesting except this is a terrible idea to open up to recreational traders. I say traders because when the average person thinks of options, they see it as a way to make leveraged bets and get rich quick. Likewise, institutions largely use derivatives (options, swaps, swaptions, etc.) to hedge their positions. The option, for an institution, is a hedging instrument, not a speculative instrument.

Here's the real reason this won't end well for most recreational traders - you're going to get scalped by the desk traders and algos at the prop shops for any illiquid options, and hit by the broader universe of trading algos out of the funds for any liquid options. You won't be able to see the order book and wouldn't know how to trade it even if you could see it. (@SIG @JaneStreet @DRW chime in)

But if you see this as a fun way to gamble knowing that the house (the Street) has a sizable built-in advantage, be my guest.

<comment><USER3> I agree with the spirit of your comment. But this:

 _> The option, for an institution, is a hedging instrument, not a speculative instrument._

is not entirely correct. It's not at all uncommon for institutional capital to use options for directional leverage. Options are sophisticated derivatives for increasing upside, not just limiting downside.

<comment><USER4> Fair point. Looked back in my notes and can't find a percentile breakdown of the use of options in markets. For the derivatives markets as a whole less than 7% are even options.

</comment></comment></comment><comment><USER5> "Multi-leg options strategies have been one of the most frequently requested features by options investors on Robinhood. With multi-leg, you can trade Level 3 strategies such as iron condors, straddles, strangles, call and put debit spreads, and call and put credit spreads more efficiently, invest at a lower risk, and with less capital requirements. "

I've never traded options. Have any non-traders here effectively used any of the above mentioned strategies? If so, how do you learn to use these techniques?

<comment><USER6> Multi leg options sound weird on paper but aren't too hard to understand when explained properly.

An option is a bet on the future price of a stock. If you think that Stock XYZ will go from $15 today to $20 next month, you can buy an option that will reflect your prediction.

A multi-leg option allows you to bet on the "magnitude" of a stock's price change, rather than the "direction".

For example: "Tesla reports earnings next month. They're either gonna be REALLY good, or REALLY bad. So let me buy a multi-leg option that predicts a 10% price jump either up or down". You'll make money whether Tesla goes up 10% or down 10%. You'll lose a ton of money if Tesla remains roughly the same price.

<comment><USER7> Actually, it doesn't work like that.

If a stock is volatile, as TSLA is, the out of money (OTM) options will take that into consideration and the premium for it will be very very high.

A OTM straddle options trade probably a very bad choice. Like you said, if TSLA don't make a big move, you will lose. Even if they do make a big move, you will still lose because you are opening a trade on both directions.

My personal opinion on options is this: 1\. Find stocks that move 2\. Buy in the motion options 3\. Expiration at least 6 weeks away, prefer to be longer. If price move into your target, great, take profit early.

<comment><USER8> I suspect you meant to type "2\. Buy in the money options"

<comment><USER9> Given the context, wouldn't 'out of the money' options make more sense? You win big if the price goes into the money.

</comment></comment></comment></comment></comment><comment><USER10> I don't understand how brokers offer options trading without also offering an options analytics package (vol, greeks, etc.) or are people using some third party service and just coming to robinhood for execution? seems like its just leading the lambs to the slaughter...

<comment><USER11> > Seems like its just leading the lambs to the slaughter...

Well why do you think they aren't charging commissions?

<comment><USER12> You are exactly right. The electronic options exchanges facilitate market makers paying brokers for order flow.

The broker can send the order to the exchange with a field denoting their preferred market maker. In the absence of that field being populated, orders are allocated either by size (% of the best bid) or by time (who established the best bid first).

If that field is populated and the preferred market maker is on the best bid or best offer, he receives an outsized allocation of the order. The market maker keeps track of the number of contracts it has traded with that broker where the field was set and pays the broker whatever fee they've contractually agreed upon multiplied by the number of contracts.

The market maker can afford to do this because retail order flow is highly profitable to trade against (it's "dumb money"). In fact when a market maker runs a look back analysis on the profitability of his trading, he will see that his trading with other market makers and institutional orders results in almost no profit, whereas the retail flow is highly profitable.

This "payment for order flow" (PFOF) is not shared with the customer. So even if the customer pays no fee to trade, Robinhood can still earn a profit.

Source: Was an electronic options trader

<comment><USER13> > Source: Was an electronic options trader

So did you make your millions and retire to an island, or did the options trading not work out?

</comment></comment></comment></comment><comment><USER14> Option strategies can actually make a lot of sense in many cases. Ex, a zero cost collar lets you lock the value of a stock position in a narrow band in case you are worried about the market but don't want to sell of right now.

A good source of info is:

[https://www.optionseducation.org/tools/strategybuilder.html](https://www.optionseducation.org/tools/strategybuilder.html)

Good descriptions and visual tools for building and pricing strategies.

If you like that you can sign up for early access to more advanced tools at:

[http://inside.cboevesttech.com/retail/](http://inside.cboevesttech.com/retail/)

Happy to discuss other uses or applications of options, just drop me a message.

</comment><comment><USER15> It's weird to me that they've prioritized these complicated options strategies before shipping a dividend reinvestment program (DRIP).

<comment><USER16> Not weird when you realize what the target market is, which is basically those that want to get a little bit of "gamble" on. I'm sure their valuation is also closely tied to the volume of trades they provide, so they want people to be trading as much as possible on their accounts. A DRIP would just take away liquidity for amateur traders. They want people to see money in their account and trade with it, the DRIP would keep that money out of their accounts.

While I obviously think Robinhood is amazing for disrupting an industry with pretty high fees, I worry that it is basically becoming gambling for a certain part of the population.

<comment><USER15> You make some interesting points about incentives. Robinhood obviously doesn't make money off of transactions, so they have to make it somewhere else. There's the premium memberships, and I believe others have mentioned that they make money off of the cash that sits in your account (not sure how that works or if it's true). In the latter case, DRIP would be directly opposed to their business model, since the dividends that would otherwise sit in your account are being funneled into a share of some sort, instead.

<comment><USER17> It's not entirely true that robinhood doesn't make money on transactions, given that they receive payment for order flow.

<comment><USER15> Can you expand on how this works? What is "order flow" and who is paying them for it?

</comment></comment></comment></comment></comment><comment><USER18> /r/wallstreetbets need to be careful here, so many new and interesting ways to end up homeless.

<comment><USER19> I think you mean /r/robinhood... WSB is mostly just going to laugh at people over there detonating their accounts

</comment></comment><comment><USER20> I'm confused as to the popularity of Robinhood and others, do people really think they can beat the market? It's just gambling at this point, not investing.

<comment><USER11> Are casinos not popular?

<comment><USER20> They are, but we don't refer to them as "investing" ;)

</comment></comment></comment><comment><USER21> I've been trading options for several years with some incredible luck (turned a few thousand $ into six figures in my early 20's). Granted my risk tolerance has changed quite a bit since - many would consider buying OTM calls/puts prior to earnings straight-up gambling. That said there are many fun yet effective strategies to hedge risk using these multi-leg trades (Reverse iron condor etc).

</comment><comment><USER22> Hmm, can we say this is the modern version of taxi drivers giving out stock tips and the market is near the top?

<comment><USER23> Nope.

</comment></comment><comment><USER18> For anyone interested Chris O'Neil, Robinhood Product Manager will be doing an ama on /r/robinhood Wednesday, June 13, at 2:30pm Pacific // 5:30pm Eastern.

</comment><comment><USER24> Introducing more ways to lose money

</comment><comment><USER25> Why this sudden rise in option trading facilities for retailers? Whats being cooked behind the scenes?

<comment><USER26> As an amateur retail investor, my theory is that stocks are too expensive. It used to be common practice for companies to do stock splits to make it more affordable but that doesn't happen anymore. Options provide a cheaper way of speculating on stocks.

</comment></comment><comment><USER27> Looks like it's US only. Bummer.

</comment><comment><USER28> Its about time!

</comment><comment><USER29> No point using all these option strategies. Once you start using these strategies it means you don't know the direction. Why waste your profits and pay premiums.

Find options you like and get in on them.

TSLA over $347.50 buy short term options, targets are $400.

<comment><USER11> What are you talking about? You can do directional with multi-leg just fine. Like you could buy the August TSLA 350 for $25.50 and sell the August TSLA 400 for $9.25. Selling the higher contract lowers your entry price to $16.25 and you'll make money at expiration from TSLA being $366.25 instead of having to be above $375.50. Max upside ends at $409.25, but more likely to actually be profitable.

<comment><USER29> Why am I going to sell and pay premiums when I can just make the money wasted on premiums. If you are hedging options then you are unsure of direction is all and limiting max profits.

www.plainsitemanagement.com --> I hit winners. Better than anyone out there.

Also, I don't hold until expiration but I want maximum profits, not basic money.

</comment></comment></comment><comment><USER30> Just to take a step back and look at the big picture here, isn't it amazing what tech has done to the distribution of access to wealth? Instead of "blaming the system" like yesteryears idealists, now one can 'bring home the bacon' by doing some of those multi-leg options strategies (that we all love) themselves, without even leaving the house.

Reminds me of the app's namesake, Robinhood [0].

0\. [https://en.m.wikipedia.org/wiki/Robin_Hood](https://en.m.wikipedia.org/wiki/Robin_Hood)

<comment><USER31> Yes! And the results have been outstanding! [https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...](https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States#/media/File:US_Wealth_Inequality_- _v2.png)

<comment><USER30> Yikes, was unaware. Have an upvote!</comment></comment></comment>


Show HN: Beunto: A general purpose, ad-hoc, application builder - <AUTHOR> https://beunto.com/tim/blog <comment><AUTHOR> Hi Hn'ers,

I making this posting to show you a personal project of mine that I've named Beunto (it's an app builder for single page web apps). I've chosen to link a blog post first since I feel there needs to be an understanding of what you are looking at. The post does link to a proto-type app [1], built with Beunto, that I've deployed for just the HN community to take a look at. With that said, there are some issues I want to highlight, in addition to the posts overview, that I think will help frame the current state:

* It is largely experimental at this stage.

* It requires js and I would consider it intensive.

* Currently has a large js payload (842kb minified, which I should be able to get to 500kb or so in the future)

* You don't need to create an account to check it out (that's only for persistence and search capabilities).

* It's not open source (at least not yet, as I've not decided on its future path)

* It has only been used with Safari, Chrome and FF on Mac OSX, so I wouldn't expect much outside of that set-up.

* Everything is very custom and I know there are HNer's with strong opinions against some things I've decided upon, so try to keep an open mind as it can and will change, evolve and continue to develop.

Thanks for checking it out. Tim

1\. The Goal Tracker App: [https://beunto.com/my/goals](https://beunto.com/my/goals)

</comment><comment><AUTHOR> FYI the google font link seem to break some FF users so I took that out.</comment>


Update your copyrights for the new year with GitHub-copywriter - <AUTHOR> https://github.com/ryanmjacobs/github-copywriter

<comment><USER2> I have chosen to just remove years from copyrights/licenses.

AFAIK the copyright isn't invalidated by not giving a date; In fact I'm not even sure if a copyright notice is required at all.

Copyright years seem to be understood differently anyway. I've heard that it should be the _beginning_ of the copyright, so there is no need to change it. The problem is that your copyrighted work is probably changing, so that brings up the question if those changes would justify a change to the date or not. I have also seen the format of "2013, 2015" or "2013 - 2015" using the first version's year and the current year.

It's all a big mess IMO

<comment><USER3> Under the Berne Convention copyright is an unregistered and automatic right - it took USA 102 years to ratify, until 1988. Prior to that in USA - as I understand it - one needed to register a work and put a copyright notice on with the year of registration. So it's a hang over from that really.

Having proof of the date of creation of a copyright work is useful - which is why print copy can still usefully have a date, but a © symbol as a claim of copyright is pretty useless except as a pseudo-legal claim (like a "shoplifters will be prosecuted" sign in a bricks-and-mortar store). A date might still serve as proof for a digital work that gets archived by a third party (like archive.org) but the ease of alteration makes it pretty poor otherwise.</comment></comment>


Ansible, Puppet, Chef: No Thanks - <AUTHOR> https://fortyft.com/posts/ansible-puppet-chef-no-thanks/ <comment><USER2> > Work on large systems long enough and immutability becomes a very valuable > concept.

On the other hand, if you work on _medium-sized_ systems (and those are much more common than _large_ ones), immutability is too expensive to work with.

> Installing application dependencies when each server starts up increases the > chances of servers running different versions of packages

Only if you're stupid enough not to package your dependencies, if you use distribution not suited for servers (like Fedora or Ubuntu non-LTS), or if you use external repositories you don't control that don't have stable retention policy for packages. And mind you, these three were always a bad idea. Appearance of Kubernetes and other magic faerie dust of Docker haven't changed it.

<comment><AUTHOR> > On the other hand, if you work on medium-sized systems (and those are much > more common than large ones), immutability is too expensive to work with.

Care to elaborate on your experiences here? Mine have been the opposite for smaller systems.

> Only if you're stupid enough not to package your dependencies, if you use > distribution not suited for servers (like Fedora or Ubuntu non-LTS), or if > you use external repositories you don't control that don't have stable > retention policy for packages. And mind you, these three were always a bad > idea. Appearance of Kubernetes and other magic faerie dust of Docker haven't > changed it.

Valid point -- though I would still argue that packaging and distributing dependencies at the container level is easier to get right than at the system level. I might be in the minority, but having managed custom RPM repositories for projects and leveraged tools like FPM, (Effing Package Manager), the move to containers was a huge win in terms of flexibility (each container having its own dependencies) and organization.</comment></comment>


Watch Bill Nye Explain Climate Change to GOP Congresswoman Marsha Blackburn - hippee-lee http://m.motherjones.com/blue-marble/2014/02/bill-nye-marsha-blackburn-climate-meet-the-press

<comment><AUTHOR> From Wikipedia:

Blackburn has been a member of the following committees: Committee on Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade, vice chair Subcommittee on Communications and the Internet Subcommittee on Health Care Subcommittee on Oversight and Investigations,[2] vice chair - Commerce, Manufacturing and Trade Republican Study Committee, former communications chair National Republican Congressional Committee, communications chair

She was also a member of the following caucuses:

        Congressional Songwriters Caucus, co-founder, co-chair
        Reliable Energy Caucus
        International Conservation Caucus.

She served as an assistant whip in the 108th and 109th Congress, and served as a deputy whip for the 110th and 111th Congress.

Ms. Blackburn has a B.A. Degree in Home Economics from Mississippi State University, a research university ranked 142nd in the US by US News in 2014.

One has to wonder if she is the best possible person to be crafting law and policy. One also has to wonder why it is that more scientists and engineers are not elected to public office.</comment>


Ask HN: What Is HPE's Simplivity? - <AUTHOR> https://www.hpe.com/us/en/integrated-systems/simplivity.html
Having some trouble understanding what the technology stack and value proposition is, exactly.
I understand so far that it apparently includes a portfolio of rackmounted servers which are ideal for virtualized systems, and maybe there's some custom silicon/hardware accelerators included that do depuplication/compression/etc to offload that stuff from the CPU cluster.
Are services included? Subscriptions? or just servers? I presume this lineup competes with Dell's blade portfolio?
Many thanks for the help figuring out the technical / business landscape of this brand. <comment><USER2> I use it exclusively in my environment. Most people don't understand what exactly it does, but it's not like your traditional SAN/Host configuration.

Not sure what you mean by services included, there is an exclusive simplivity support team. They will have a blade offering at the end of the year based on my meeting with HPE Simplivity back in December.

It's somewhat difficult to explain, but it's essentially deduplicated and compressed bit level server hardware that shares storage in a vSAN like configuration but it replicates blocks.

So say you have 10 RHEL VM's, with only 100mb of unique data varying across the 10 VMs. Since those VM's all match in terms of block data, that storage space is not taken up, only the unique data is. This block level matching means you have a super high efficiency in terms of storage use. So even though all those VM's look like they take up say 10gb of storage each, in reality those 10 VM's combined are only using 11gb of data because that first 10gb is static read blocks that are essentially co-shared by the VM's since it's the same and the other 10x100mb is unique. I hope that makes sense. This also enables super, super fast backup and recovery. It is amazing technology and faster than any traditional backup system I've ever used. I can restore a VM back to say 12AM yesterday in as little as 3 seconds and auto power it back on.

I would really encourage you to speak with a Sales Engineer as they can explain it more detail.

I currently have 6 hosts in my environment and it's amazing if you want tons and tons of VM's that do not host a lot of unique data. If you have large data-sets of unique data it is still really useful, but I would just encourage people who have those large datasets to look into purchasing a traditional SAN. But in terms of efficiency, nothing compares. It is amazing.</comment>


Show HN: Kish Map - <AUTHOR> http://map.kish.ir/?lang=en

<comment><AUTHOR> An aerial map of Kish Island, South Iran, for the Kish Free Zone Organization

The UI is not a catch, but it's a work in progress. I hope it'll be better in a few iterations.

<comment><USER2> What is the idea behind the Kish free zone? Is the idea to experiment with alternative economic models like you sometimes see in china for specified regions? Same government, alternative laws?

<comment><AUTHOR> Yeah, that's the Idea.

You could read more about it here: [http://en.wikipedia.org/wiki/Foreign_direct_investment_in_Ir...](http://en.wikipedia.org/wiki/Foreign_direct_investment_in_Iran#Free_trade_zones_and_special_economic_zones)

</comment></comment></comment><comment><USER3> Can you give us some background on that? What is this island? Isn't it on Google Map?

The website works great, but I am curious!

<comment><AUTHOR> Well it is an actual island, available on any world map including Google's. Though, this map has more details and it's designed to help tourists find out what is to be seen around the island. It also contains all businesses and local services, listed directly by the KFZ Org.

<comment><USER4> First of all, well done! (khaste nabashid)

I'm wondering along the same path. I can imagine why you wouldn't want to use google as your main source, but any reason you didn't use openstreetmaps apis?

<comment><AUTHOR> There is still a lot to be done, but Thanks :)

As for the map, I'm not responsible for that matter; but AFAIK it was specifically asked! Besides, every single detail is carefully highlighted manually, so we could say it's more precise than Google Maps (plus the sanctions situation). and as I mentioned in a replay to another comment, KFZ Org. provides local business information; so it basically contains (should contain) every single business and public service available on the island.

</comment></comment></comment></comment><comment><USER5> Is this hosted inside Iran? It's pretty fast from here(Northern California)

Khasteh nabashid! Good job!

<comment><AUTHOR> I think so, yeah!

Sepaas :]

</comment></comment><comment><USER6> Very neat! When I clicked around, it looks like a few of the places categories come back with all the places as "undefined". I got this for bakeries and food markets.

<comment><AUTHOR> Thank you for the feedback.

That's partly because the original info is in Persian and translation is in progress.

</comment></comment><comment><USER7> Cool! What kind of mapping engine did you use? Google Map Engine? CartoDB?

The bounded view works nicely.

Mikhaem yeh rooz beh anja safar konam.

<comment><AUTHOR> Thank you.

Unfortunately, I'm not aware of the technical details of the back-end, as I was only responsible for the front-end application development.

Baraye shoma arezooye movafaghiyat daram. :)

</comment></comment><comment><USER8> My only feedback is that left-right swipe on Mac OS X zooms rather than going back/forward.

<comment><AUTHOR> Thanks for the feedback, I'll look into it.</comment></comment>


The Surface Go reviews are in, and… they're a bit all over the place - <AUTHOR> https://arstechnica.com/?p=1352263 <comment><USER2> > In practice? Gizmodo wrote that while the system was fine for browsing and > mail, it was the slowest system (by far) in a Photoshop benchmark, and it > achieved around three frames per second in a Civilization VI test

I wonder why they benchmarked it using Photoshop or Civ VI. It's supposed to be a tablet like device running Windows 10 for $399. It's bound to be slow for playing games or using high performance software like an IDE. Shouldn't it be compared with what you do on an iPad or Android tablets?

<comment><USER3> Microsoft's marketing: "Performs like a laptop, travels like a tablet."

It it performs like a laptop, it should be tested like a laptop.</comment></comment>


In our eyes, Google's software sees heart attack risk - <AUTHOR> https://www.washingtonpost.com/news/the-switch/wp/2018/02/19/google-used-artificial-intelligence-to-predict-heart-attacks-with-the-human-eye <comment><USER2> As my PI notes, a lot of the success here can be explained by the model's excellent ability to determine age from the images of the retina. [https://twitter.com/skathire/status/965661596503638016](https://twitter.com/skathire/status/965661596503638016)

This is quite good age detection - other efforts that I've seen (from face images, rather than retina images) are +/\- 5 years, whereas this paper gets age to within +/\- 3 years or so.

The fact that the model automatically detects anatomical features that humans recognize as being important is promising for a variety of applications, I think.

</comment><comment><USER3> I suspect that it's mostly the amount of data that allows this, and that the software is just using run-off-the-mill statistics/ML. The title should reflect that. It's not the software, it's the data.

</comment><comment><USER4> Remember what happened they tried to predict the flu. [https://www.wired.com/2015/10/can-learn-epic-failure- google-...](https://www.wired.com/2015/10/can-learn-epic-failure-google-flu- trends/)

In [https://www.kaggle.com/c/diabetic-retinopathy- detection](https://www.kaggle.com/c/diabetic-retinopathy-detection) actually ML algo did better than humans. Yet it will take time for apply these widely.

<comment><USER5> Those are two entirely unrelated methods. One worked, one failed. One is a sort of "wisdom of the crowd" algorithm (as in human crowds) and it failed after initially showing promise (essentially it worked until someone told the crowd), one is machine learning from images.

</comment></comment><comment><USER6> Pretty cool to see those photos. I used to work at a company that makes fundus cameras that take those kinds of pictures.

</comment><comment><USER7> Any optician can do exactly the same thing during a simple check of your eyes. In this case I can't see the benefit of this type of screening. The tool used by the optician is just a cheap lantern, but only the tool needed by the computer is way more expensive.

<comment><USER8> I'd suspect the tools will eventually be dramatically cheaper than a trained optician. Put it in a pharmacy, grocery store, or other central location and people could screen weekly instead of once every couple years (assuming they even _see_ an optician).

<comment><USER7> As I have explained before, in Spain an optician does not charge anything for it because it's ridiculously simple and it's a small percentage of the effort that an optician needs to do for a prescription.

This test is different of a blood test for example. You don't need to control the evolution weekly, or even monthly.

This is one of the most simple screening process. Because it's easy to train the model with tons of images already made by opticians and optometrists. It does not have any value, it's too simple.

My brother is an optician and has a huge database with retina images. If even me with limited knowledge of ML and my brother as field expert could train a model to detect blood pressure problems.

Too simple, no value.

<comment><USER9> Simple? Yes but there's absolutely value in this. In Pakistan I've never had an opthalmologist comment on my retina before, despite wearing glasses since I was a child.

Not everyone has an opthalmologist brother, or is a machine learning engineer. You should have used this to your advantage to make something like this.

How many startups make simple applications? Uber is a simple marketplace, as is Airbnb, and PayPal is a glorified accounting database. Please don't downplay the impact of a product because of its simplicity.

<comment><USER7> AI and ML should take mankind to a new level. This article describes something that opticians and optometrist have been doing for a long time with a more classic computing algorithmic approach.

<comment><USER10> What's wrong with simple; if simple works ?

</comment></comment></comment></comment></comment></comment><comment><USER11> Honest question: why is that an alternative medicine eg. Iridology is seen as quackery but a computer predicting heart attack risk is not? I know the science behind AI but from a patient point of view, they both analyze the eye.

</comment><comment><USER12> >Google's algorithms were able to predict whether someone had high blood pressure or was at risk of a heart attack or stroke

How is that different from just measuring the blood pressure (with really inexpensive device)?

</comment><comment><USER13> What do you do after you discover you are at risk? Get your affairs in order?

<comment><USER14> It gives a high-risk group the ability to notify their friends and family and practice what to do in event of a heart attack. My mom frequently stays with me, but outside of "call 911" I don't really know what to do in teh event of a heart attack. Time lost is lives lost, so better preparation could quite literally save lives.

<comment><USER15> You could carry a defibrillator with you.

</comment></comment></comment><comment><USER16> i think it'll be quite some time until ML and CV can do the breadth of diagnostics for all possible things.

my wife is an optometrist. just from looking at retinas, she finds brain tumors among other scary systemic problems. even if you have perfect vision, go in for an exam, it can literally save your life.

</comment><comment><USER17> > opening a new opportunity for artificial intelligence in the vast and > lucrative global health industry.

well done! google will join the lucrative industry of the people's health. the rich will survive, the other will build the machine to make them survive.

</comment><comment><USER15> Anybody have the link or how can I test myself?</comment>