Crypto Fund II
a16z.com
a16z.com
I guess even they couldn't convince themselves to want to build things. I suppose that hollow rhetoric was for everyone else and not them?
If someone figures out the next step of search, google could disappear quickly. AT&T, not nearly.
These things take time, and this was probably in the works from before.
The "time to build" nonsense was about spending taxpayer's money. That is, telling the American government how to spend it.
Consider that a16z and its clients probably do not pay much taxes. Certainly they pay less than people who cannot afford the same level of profesional services required to reduce their tax burden to the same extent.
If America builds infrastructure and better educational systems, a16z and their clients will benefit, along with the folks who actually paid for it. Whether those benefits would be disproportional in favor of a16z and its clients is left as a question for the reader.
one whole thesis here is "Modern Store of Value". is Crypto Fund II just gonna put 25% in bitcoin?
"New Ways for Creators to Monetize". i feel this is the weakest thesis of the lot. i dont see how decentralization helps here.
alright im done being crabby hn commenter. good luck to cdixon and katie haun, and the people actually trying to invent the future.
Bad. Very, very bad.
> i'm really curious what kind of GP throws good money after bad on out-of-favor stuff like this. not that it can't work, its just unusual.
Crypto is at the intersection of ancaps and difficult, probably intractable engineering problems. That intersection is highly idealistic and highly motivated, with an almost religious zeal.
During the ICO boom, they got access to tokens before they ICO'ed, usually at 70-90% discounts. They also make a lot of equity investments into the companies behind the protocol.
I have no idea what their numbers look like right now. And it will be hard to judge as most of their investments are illiquid at this point and don't know how they'll work out. Chia, Filecoin, Libra, ... haven't launched so could end up being worth a lot or could be worth 0.
See: https://www.investopedia.com/news/bitcoin-pizza-day-celebrat...
It is by no means the best performing asset. Anyone with shares from the formation of a startup has outperformed.
Not to mention, at formation, you're more than welcome to pay market salaries to your founders, that's your perogative as a founder.
Bitcoin as a "passive investment" is such a lame comparison because it does, literally, nothing, just like hanging onto some beanie babies. Beanie babies, but much more wasteful.
[note] Anyone who's an employee or an accredited investor.
It's not a lame comparison at all. If you bought Bitcoin in 2010, you've seen a 8,900,000% ROI. The asset may go up another 10-1000x from here. Bitcoin will outlast Uber. And if you're still comparing it to Beanie Babies 11 years later, it's likely you don't understand finance or blockchain, and you haven't been paying attention to what's happening in the past few years.
Or it may go down to 0. Your assertion is as likely as mine, and you’re not basing it on anything it all. Past performance != future performance.
> Bitcoin will outlast Uber.
Ok, that doesn’t mean it’ll be worth anything. Or if it does that doesn’t mean anyone will have their keys haha. Every random walk down the timeline results in 100% of keys lost haha.
> And if you're still comparing it to Beanie Babies 11 years later, it's likely you don't understand finance or blockchain, and you haven't been paying attention to what's happening in the past few years.
It’s because I’ve paid attention. Citing the divine scriptures of satoshi isn’t sufficient dismissal.
When analyzing an asset class you have to look at probabilities. Probability of Bitcoin going to zero during a financial crisis, where people are losing faith in local currencies around the world:
https://www.houstonchronicle.com/news/article/Lebanon-PM-bla...
https://cointelegraph.com/news/demand-for-bitcoin-surges-in-...
...is near zero. It's much more likely that adoption continues and Bitcoin matures as a financial asset class, not just in the developing world, but here in the U.S.:
https://www.cryptopolitan.com/caitlin-long-to-build-a-crypto...
https://decrypt.co/resources/bakkt
https://bankless.substack.com/p/9-going-bankless-w-maker-and...
As for the random walk and 100% of keys being lost...maybe if you march out the timeline long enough, the whole human species isn't going to exist any longer...so there's that. But I would argue strongly that Bitcoin (and Ethereum) has better prospects than any other digital infrastructure.
In the mean time, the next few decades look very bright indeed.
BTC has dropped 50% in value over the last three years, while the currency has inflated 5%. I know which I'd rather hold. Actually I'd rather hold neither, I'd rather be invested.
> It's much more likely that adoption continues and Bitcoin matures as a financial asset class, not just in the developing world, but here in the U.S.:
Fewer people care about it than practically ever:
https://trends.google.com/trends/explore?date=all&q=bitcoin
> As for the random walk and 100% of keys being lost...maybe if you march out the timeline long enough, the whole human species isn't going to exist any longer...so there's that. But I would argue strongly that Bitcoin (and Ethereum) has better prospects than any other digital infrastructure.
20% of BTC has already been lost.
Probably more if you count Satoshi's wallet, which likely belongs to Paul Calder Le Roux, currently working with the DEA as penance for his many, many crimes. [1]
The price is largely propped up through a massive fraud perpetrated by Tether and Bitfinex. All the folks with those heavy, heavy bags have no interest in surfacing it, as it has become too big to fail within the crypto community.
[1] https://www.wired.com/story/was-bitcoin-created-by-this-inte...
Society is fine with startup founders and "employee number 5" making their fortune because they put in actual effort to build a company.
The bitcoin millionaires happened to mine a few coins in 2011 before most people knew about it and then just did nothing as you said. Zero contribution to society from making that paper (or bit) fortune.
Why on earth would everyone else not on the right internet forum in the early 2010s make the few that were fabulously rich?
Investing in stocks is a similar passive income, but at least in that case the investors money is going towards some business that pays a wage to workers or provides some net benefit to society (hopefully).
And I'm guessing the Uber seed round wasn't available to the average investor. If you just look at the public companies available to everyone, another quick google says the best in the last decade was Netflix at 40X gain.
If you ask the SEC the majority of ICOs aren't available to the average investor either, and never should have been. Because the vast majority are pure, hot, unadulterated garbage like Dentacoin and IOTA - which emulates a ternary computer for literally no reason anyone can identify.
Seems like you just have an axe to grind.
It's like a16z launching a fund to invest in retail video game sales (due to the overwhelming success of $GME) in shopping malls but also run by criminals and utilizing more power than your average country. It's stupid technology.
And for the record, I've no axe to grind, I made a bunch of money in the run-up, and sold all my crypto at BTC$17000. That doesn't mean I think it's at all valuable, or would recommend literally anyone buy any, ever.
By the end of the stock market downturn of 2002, stocks had lost $5 trillion in market capitalization since the peak.[39] At its trough on October 9, 2002, the NASDAQ-100 had dropped to 1,114, down 78% from its peak.[40][41] Many online shopping companies, such as Pets.com, Webvan, and Boo.com, as well as communication companies, such as Worldcom, NorthPoint Communications and Global Crossing, failed and shut down.[42][43] Others, such as Cisco, whose stock declined by 86%,[43] and Qualcomm, lost a large portion of their market capitalization but survived, and some companies, such as eBay and Amazon.com, lost value but recovered quickly.
Most cryptos (that are not ICO scams) are hammers looking for nail. Outside of some very niche use-cases, most are non-competitive with centralized payment systems. Keep in mind there is a difference between an investment vehicle and a currency, and just about anything is a decent investment if your risk tolerance is high enough.
The fervor by which they're pushed by fans is almost religious in that their arguments stem from asking you to ignore certain facts and have faith, usually in the holy whitepaper.
Blockchain tech, specifically is this. There are a handful of interesting, viable use cases, but most are solved better in other ways.
As the scriptures of the great Satoshi Nakamoto [1] foretold, the bankers are coming to steal our net worth through inflation. Therefore, help me move my narcotics proceeds overseas.
[1] (Satoshi is likely the international narcotics and arms trafficking, real-life, super-racist Bond-esque villain Paul "Solotshi" Calder Le Roux: https://www.wired.com/story/was-bitcoin-created-by-this-inte...)
There's another reason too: faulty reasoning by superficial historical analogy. There's a crowd of people who think cryptocurrency resembles the early Internet, and that its detractors are wrong in the same was as Paul Krugman was when he thought the net would turn into nothing.
The difference of course is that the Internet was immediately useful to an exponentially exploding number of people. I got on the net in 1993-1994 as an early teen and immediately found a ton of fascinating stuff to do with it. I helped less tech-savvy people (including my step sister) get online and they started enjoying chat rooms and the very early web.
Nobody uses cryptocurrency except users in a few niches that have remained relatively stable since its inception: people using it as an alternative wire transfer method, black/grey market commerce, and enthusiasts who just think it's cool and go out of their way to use it for the sake of using it. Those niches exist but they aren't growing very fast.
Reason from first principles, not by analogy.
Essentially, EY expects public blockchains to do for B2B what ERP software did for internal operations. They're building zero-knowledge tech to make that sufficiently private and help with scaling.
Yes, but it's totally and completely unnecessary. If a company doing business with another company doesn't trust either the other company or a mutual jurisdiction to remediate -- they just shouldn't be in business together. No amount of blockchain magic fairy dust is going to change that.
Blockchain also only accurately reflects things solely encapsulated within the blockchain. As soon as you're trusting someone to enter data they can enter false data, and now you've got a permanent immutable ledger of hot garbage.
The video you linked leads with "it's been too complicated in the past to explain return on investment" lol, if you can't tell me if your product will save me money or not, your product is bad and will cost me money.
It's like going to buy a new fangled electric car, and you asking the salesman, hey, so how much will this save me on gas! And the salesman responds: "well that's hard to say." That's not a good sign.
You could run everything on one system, but companies don't like trusting and paying whoever runs that one system, so mostly they run their own systems, send messages back and forth, and do a lot of cumbersome mutual auditing. That's exactly the sort of thing EY works on for a living.
There's absolutely no reason that (1) Microsoft licensing should have taken a month to begin with, that's madness, you can buy a license on their website in seconds -- so it was a process and policy issue, not a technology issue and (2) there's no reason that if you trust Microsoft and Windows to validate that license information that you can't trust them to store that license information alongside your receipt/proof of purchase. None. They're required to hold on to it by law anyways. And if they don't honor it (and they will) you can always sue them.
Who on earth needs to validate MyCo has a license to Windows other than MyCo and Microsoft? Absolutely nobody. And if you don't trust Microsoft to honor the license in the first place why are you doing business with Microsoft?
Now beyond that, EY. They're not selling blockchain, they're selling SaaS apps built on top of blockchain technology because they need to meet CTO/CIO buzzword quotas. Their SaaS apps could be just as easily run on, wait for it, AWS.
The transnational nature of it is interesting. But otherwise ya, I agree. Very niche at the moment and not really exploding in use or use case.
So, the hedge seems to concern investing in a new computing platform that will gain traction around 2021-2023. Does either the thesis or hedge seem bad? Well, the thesis doesn't seem obviously bad in comparison to other VC theses out there (I mean, theses are sort of about putting a stake in the ground with regards to predicting the future). Let's agree the thesis is sound. Is the hedge still bad? I don't know. If you were to line up the other options, like A.I. and AR/MR/VR (are there any others?), I'm not sure one would really stand out above all the others. Maybe A.I.? But even then, they've already invested in the other options (especially A.I.), so at this point it's a matter of distribution of invested capital.
Could the crypto investments end up being complete and embarrassing failures. Definitely. But, I'm not sure how this risk really stacks up to a different hedge for 2021-2023. It doesn't seem to be obviously bad in comparison to the other options.
And numerology with suspect numbers at that; 1978 was the year after the introduction of the first viable personal computers, 1993 was, er, Mosaic came out I suppose, but it was not the year the web showed up (that was earlier) or the year that it started to see widespread adoption (that'd be, er, 95 or 96). 2007 was the year that smartphones became mainstream, if you don't count blackberries or other consumer quasi-smartphones. This all feels very cherrypicked to fit the thesis.
I don't know what their reasoning is, but I suspect it's a mix of everything discussed on this thread: ancap/right-libertarian ideology, an affinity for sexy tech regardless of usefulness, faulty reasoning by historical analogy, reality distortion due to having made money off the crypto bubble, and a bit of sunk cost fallacy.
I am willing to be proven wrong. Show me growing uses of cryptocurrency that are not one of: niche wire transfer applications, black/grey market commerce, cryptocurrency aficionados nerding out, gambling, speculation, fraud, or solutions in search of a problem. Those are all (except the last two) real applications to varying degrees, but they're not large, rapidly growing, mainstream, or of that much interest to business customers.
In other words show me something someone that doesn't care about cryptocurrency would use. The Internet in the mid-90s offered a ton of things people wanted to use even if those people didn't know what an IP packet was.
I have asked the above in various forums, Twitter, etc. for years and so far nobody can produce anything. The closest I've ever seen is this:
It's the only ICO project I know of that has actually shipped something usable and possibly useful. Still that's one singular example and it's not like they're going to displace Amazon S3 or Backblaze any time soon.
Is it a good thesis? What's your criteria? By any scientific criteria, of course, the thesis is asinine. However, if the criteria is other VC theses, then it is an adequate thesis.
"AI" is great at solving fuzzy matching and pattern inference, which opens up a world of interesting things. Image segmentation, image analysis, dynamic image infill, facial recognition, and so on can all benefit. Is it a be all and end all technology? Probably not, certainly not yet, but it's clearly, trivially and obviously superior for a certain problem domain.
Just because something happens "every 15 years on average" doesn't mean it happens on a 15 year clock and it certainly doesn't mean you can just throw a lawn dart and hit one in the face without using some logic, reasoning and due diligence.
An overnight success twenty years in the making :)
Everyone has had access to cryptocurrency for over a decade, yet it still only has its original niches. This is a niche technology, not the next revolution.
As an Ethereum user, I find Ethereum useful. Maybe my experience is not unlike that of the initial ARPAnet users?
While between jobs, I have paid my rent with a blockchain-based loan. I found Ethereum to be a much better creditor than a bank.
I've quickly and inexpensively sent money to friends in other countries.
> yet [cryptocurrency] still only has its original niches [after a decade]
On this point, you are misinformed. There are many niches, services, and new kinds of financial primitives that have emerged on Ethereum over the past few years.
I say that, but a transaction on the Bitcoin ledger has been more expensive than $0.15 since mid-2016 and fluctuates wildly. Other cryptocurrencies might be able to handle this better. I'm optimistic about Stellar being a useful transaction network, but I don't think the value of 1 XLM is going to move much relative to 1 USD.
The gist of it is you have a "multi core blockchain" that is only verified by a randomly chosen subset of validators that then sync their state back up to an oversight chain called the beacon chain.
The sharding design is integrated with that but won't actually be implemented until next year. First version of sharding will only store data; execution on shards will be after that.
The other thing going on is various layer-two systems called "rollups" which compress on-chain data to a minimum and prove its validity with either fraud proofs or a cryptographic zero-knowledge proof. Some of those are in or near production and can take today's Ethereum to about 2000 tx/sec, for simple transactions like transfers and exchanges. The data-only phase of sharding will multiply that by the number of shards.
All you need for micropayments are low fees - that doesn't require a pseudo-anonymous collective keeping a shared public database of transactions. In fact it's better if you know who the counterparties are.
Companies like stripe, apple, google or banks like monzo could offer low fee transactions for example between two counter-parties who are both customers, bypassing payments networks and taking on a little more risk for a lower fee.
Payment networks are ripe for disruption, but I'm not sure bitcoin et al will do the disrupting - it's solving the wrong problems.
Oddly it kind of does, but for bad reasons.
Existing rules for payment processing basically require the payment processor to eat the cost of fraud. That means you can't have small transaction fees because they have to cover the cost of fraud or the payment processor goes out of business.
A payments system where there is no "payment processor" middle man to foist the cost of fraud onto thereby doesn't require that middle man to charge high transaction fees to cover it. In principle that could allow lower transaction fees.
> Companies like stripe, apple, google or banks like monzo could offer low fee transactions for example between two counter-parties who are both customers, bypassing payments networks and taking on a little more risk for a lower fee.
Scenario: Mal uses your payment service to buy goods from Alice, Bob and Carol and pays you with a credit card, possibly stolen. As soon as the goods change hands, Mal (or the real owner of the card) disputes the charge with the credit card company.
You have a bootstrapping problem. You need a way for the customer to get money into the system which doesn't impose the cost of fraud on you if the charge gets reversed after the goods change hands.
This could also be solved by changes to the law, but easier said than done, especially with a bunch of incumbents enjoying the larger vig from the status quo.
On the other hand, there might be higher responsibility for card-not-present transactions (i.e. someone entering a CC number into a web form over the Internet, or merchants deciding to accept a CC transaction while their machine is down and can't swipe, entering the transaction later as a card-not-present).
Not an expert on this.
One remark I'd share is that many crypto systems, in their basic transaction form, remove all consumer protections like that exist in the form of chargebacks. This can be a good thing if the merchant or marketplace is reputable and can be trusted to do the right thing. It could be a bad thing for consumer protection broadly though. The fact that you can easily charge-back a transaction provides a sort of lubricant that makes consumers more willing to spend online. You know that if a subscription company makes it really a pain in the ass to cancel, then you have the nuclear option to fall back on.
(OTOH, there's no such thing for subscription payments for blockchain. You'd have to build that custom as far as I know.)
1) A significant portion of the cost of chargebacks is administrative, especially for small transactions. The banks at least nominally attempt to prevent customers from defrauding merchants, even if they fail more often than not, because if they didn't even try it would get a lot worse fast. But that costs money, and the money it costs is proportional to the amount fraud/chargebacks and not linearly proportional to the purchase price. Having to go through the chargeback process over a nickel is not something they're about, hence the minimum transaction fees. They also sometimes lose the money because it's not possible to recover it from the merchant for some reason.
2) If you're trying to become a payment processing system with low transaction fees which people can transfer money into using their credit cards, the "merchant" who eats the cost of fraud is you.
I think the potential gain in transaction fees would be worth this risk, particularly for companies which know both the customers well (e.g. already process all their transactions).
Cryptocurrencies don't address this, they simply pass the risk to the merchant instead which is far worse.
If you want the convenience of it being online, here in Sweden we have something called swish, it's essentially a bank transfer initiated by via your phone number. It is free for non business transactions (I actually don't know how it works when used by a business). As far as I know bank transfers are free in most of Europe.
Also would this work if you try going from say, Swedish citizen/bank to German citizen/bank?
Lightning network is capable of solving the issue though, as these transactions are done over a secondary layer.
The lightning network whitepaper states a base block size of 155mb is needed for it to work at scale. Right now bitcoin has a 1mb block size limit. And as you said, this size is intentionally limited, so i doubt we'll ever see lightning network work at scale.
1. It allows you to forget (most of) the system's history without sacrificing the consistency of the system
2. It allows you to distribute/factor out the work of the system into lots of independent components
3. It maintains decentralization, whereas most "fast" "cryptocurrencies" actually just work by having a trusted central authority, once you peel back enough layers of obfuscation
The lightning whitepaper also says a minimum block size of 155mb is needed to work at scale. Bitcoin currently has a 1mb block size.
I dont see lightning network being useful on a large scale until thats resolved.
Where? I just checked and can't find it. This statement also seems nonsense in isolation - positing block size requirements involves a lot of assumptions about network topology and load.
"If all transactions using Bitcoin were conducted inside a network of micropayment channels, to enable 7 billion people to make two channels per year with unlimited transactions inside the channel, it would require 133 MB"
https://lightning.network/lightning-network-paper.pdf#sectio...
If everyone on earth was using lightning, I suspect most users would be using custodial lightning wallet providers (e.g. "Wallet of Satoshi" is very popular now). I doubt even 1% of people would elect to host their own node (although it's important that they be able to). 500 bytes is also a high estimate of channel opening transaction size.
The socially efficient end state I expect looks a lot like the current state of affairs (in terms of payment network topology), except A) small institutions (including individuals) have direct access to the same financial network used by large institutions if they want it, B) the financial network is trustless, C) transactions are non-repudiable. This is to be expected - there's no reason to expect Bitcoin would cause a radically different experience for the typical end user, except insofar as they will capture whatever passive benefits may be associated with saving in a hard currency. Paypal et al is already quite convenient and technically amenable to microtransactions. The benefits of Bitcoin, while substantial, mostly occur at the margins.
The block size limit was kept small in order for everyone to be able to run their own node.
so far block size increase has not been necessary. if hyperbitcoinization occurs and there is a bottleneck with lightning, block size increase is ok.
with lightning factories this may never be necessary.
if it is, it is.
The real issue is no one cares about microtransactions because they're "micro" - and not enough to actually live off. See the artists spotify pays for plays - living that microtransaction lifestyle and making nothing.
But not if your $0.01 transaction has a $0.30 minimum transaction fee.
Where do you see microtransactions being applied in practice?
This can be seen by the 0 fees on network on Alipay and WeChat Pay which don't use crypto and transact more volume now than Visa and Mastercard seamlessly.
With the rollout of DCEP why use the others?
finally, a sane solution for micropayments for content.
you can see a sort of proof of concept (pre-lsat, but using lightning) on yalls.org and a few other similar toe in the water type sites.
but I think if LSAT gets traction it has the potential to turn the content industry upside down.
it is still very very early days.
The problem that we're actually trying to solve with all of this is how to provide a root of trust. Blockchains are a way to do that, but I've yet to see a compelling use case beyond digital cash. Attempts to implement any transaction more complicated than cash settlement on a blockchain will inevitably run into the fundamental problem: transactions are contracts, and contracts will always require a legal framework and judicial system to mediate. You simply can't remove that requirement and all of the "inefficiency" that comes along with it.
Blockchain can be used for a lot more than just digital cash. It can be used for storing immutable logs of any data/content. That implies endless use-cases.
Yes, transactions can be viewed as contracts, but the mediation is already accounted for by that specific blockchain's consensus algorithm & proposal/dispute resolution system. Most of the good smart contract blockchains already have systems in place for all this.
It ought to be, and it used to be, but unfortunately it's been hijacked by the cryptocurrency community to such an extent that it's become increasingly ambiguous.
> ECDSA
or, preferrably, Schnorr signatures.
> partial hash inversion
There's more to mining than hashing [1].
[1] https://cryptorials.io/beyond-hashcash-proof-work-theres-min...
They're also developing a plugin for MS Word to create a smart contract very easily.
Handshake [1] provides a root of trust for DNS and DANE [2]. It's also heavily in use [3]!
[2] https://en.wikipedia.org/wiki/DNS-based_Authentication_of_Na...
I don’t see how crypto solves the fraud problem. Sure there will be lower fees, but higher risk of fraud.
Glad to hear these crypto folks have figured it out.
Furthermore, credit cards aren't just payment methods--they represent credit extended to consumers by banks. This actually influences the money supply, since (1) consumers can potentially carry unsecured debt balances, and (2) consumers have less need to park money in savings since credit cards provide access to liquidity. In other words, there are a lot more factors in play here than just the transaction fees and fraud mitigation mechanisms.
Here's a post detailing what I was taking about. Unfortunately OB's interface for these things are awful and I'm not invested in its platform.
1) Moderate the moderators: Great, now we have two problems.
2) Try to tie moderators to a real-world ID: Realising they have to roll back the purported 'features' of crypto-currency (anonymous, peer-to-peer, unrestricted, etc), in order to try to get somewhere close to normal, real-world, commercial transactions.
No fraud protection is a complete consumer non-starter.
Seems to work fine in the Netherlands. If you pay through the most common platform (iDeal.nl) or do an ordinary wire/SEPA transfer, the bank can't simply do a chargeback. The money is gone, but consumers are not generally afraid to buy things online using these methods.
I'm not saying that "chargebacks fundamentally impossible" is a good thing. All I'm saying is that it seems to work in my country despite such a system, so it may (I don't know, just mentioning it as a data point / an option) be an acceptable trade-off because I hear from Factorio and others that credit card fraud and chargebacks are a real problem.
I think this is part of the picture but not explicit enough. You could ask "but why should there be points and benefits when it's just a shell game?"
What I've seen claimed is that the underlying incentive for such programs is that having fees and benefits is a way of avoiding directly charging for credit with interest that is subject to truth-in-lending regulation.
I would be careful about claiming crypto can be cheaper when some part of the fees on credit cards is just interest by another name and not really transaction fees.
Do we actually do this that often, though? Email and photo sharing are generally dependent upon third parties, and generally extremely centralized and powerful ones, such as Google or Facebook or Twitter. Very little Internet communication goes directly from one person to another.
Maybe encrypted messaging like Signal is a better analogy. Yeah, it still passes through a third party, but they can't read it.
Even so, it seems like the apps that are the most centralized often have the most communication volume, and things like Signal and AirDrop, as nice as they may be, are largely outliers. This is especially the case when we look at group communication, where many participants are involved (Reddit, Twitter, Slack, Discord, etc). I find it very hard to have private group conversations on the Internet due to these platforms, as almost every community is stuck on a completely centralized+proprietary solution by now.
If centralized entities can control your spending, they can control you. That's one of the core arguments for decentralized finance.
As for transaction reversibility, I am sure that a payment insurance program will crop up in the not-too-distant future to alleve those fears.
See, I see Crypto people mostly arguing that Crypto is going to take over a some huge percentage of transactions in order to justify some skyhigh valuation, and then when pushed back on whether it is actually superior for large percentages of transactions, they revert back to an argument that there are certain (normally politically motivated) transactions that its important for.
Unfortunately I don't see a universe where you can justify any of the valuations or importance of Crypto if the main use is the much smaller set of transactions.
I think even still, the fact that you could go p2p acts as a behavior regulator for these companies. Gmail wants to charge you a monthly fee? Jump ship to a free competitor or run your own mail server.
It's the same way with crypto. If an exchange starts charging me for custody or ridiculous fees to transfer money I'll just download my own wallet and transfer the money myself.
Which loops back to the problem: why is anyone else going to buy in?
It's still being built out, it's not snapchat or some other anti-pattern app maze delivered by hungry VCs by a crack team of fresh grads with no moral development.
This is a protocol for financial independence. And yeah, it's new money. Old money that spends like money is the problem.
Why don't we create a Let's Encrypt for banking rather than fiddle around with frankly unnecessary technology?
You name it: railways, cars, telephone, radio, TV, semiconductors, personal computing, the internet — all of these technologies were created without a complete idea of the change that would happen, and there were always investors ready to get behind the _technology_.
Re: containers and functional programming, I guess most people (myself included) see these as tools that streamline existing things but are not going to deliver the kind transformational change that these other technologies do. I realise this is subjective: some people may believe containers are in that category and/or that crypto isn’t, but what matters is only the belief between the people raising the funds and those investing in them.
Some of us crazy people are consumed by Web3 ideas so much that we spend years thinking about it full-time aren't necessarily the most social or well-connected people.
Creating an MVP for a vertically-integrated company that's carefully designed to rip the guts out of the entire existing tech monopoly is extremely difficult at best. Applying with large-scale ideas like this to YC as a solo founder without an overachieving background offers an almost infinitesimal probability of success.
Likewise, it'd be cool to see pre-seed funding from these types of initiatives. I'd love to spend another year or two just refining the notes generated by tens of thousands of hours of thought into a cohesive design document. It's so much content I'm having to create a custom spatial interface to map and organize it all into a kind of living design doc.
I suppose the point is that the deep thought required to envision things like this is at odds with creating a personal brand or playing the traditional traction-based startup game. Some of us are just out there in left field, alone. We want to bring incredible amounts of value to the table, but it's very difficult to do so.
You know, it's funny to watch Silicon Valley years ago and laugh at the "new internet" part. Then realize shit, I've actually become this person now. :)
Appreciate the advice and kind words, best of luck to you as well!
But VC's aren't investing as much in application projects, since there often isn't a clear path to profitability with a decentralized application. A big reason for this is that the layer 1 blockchain will capture most of the value of the applications running on it (for a real life example of this, see Uniswap on Ethereum).
At the same time, the success of a layer 1 blockchain is judged by how many applications it has. So maybe one could argue that applications are valued more highly by VCs for enhancing the appearance of success of layer 1 blockchains than for their own sake.
This leads to the situation you portray, where it's sometimes easiest for a founder to get investment money from VCs that has first passed through the hands of a layer 1 project.
Note that a16z typically invests starting at Series A, post-traction.
You might consider applying to MetaCartel.org - a DAO which gives small grants to people building web3 application.
( A16Z struggles to earn passing grade in crypto fund II “learn by doing” project )
In reality there are a lot of practical problems that I don't think have been solved because they are baked in.
I feel they have been mentioned a thousand times on HN.
Just to pick on one, using cash which has a volatile value is not practical for the "unbanked". Whereas "IOU" cash based on $US is. Obviously $US is volatile too but a lot less than Bitcoin etc.
Stablecoins might solve this, but they are IOUs. And if they are not IOUs then they are untrustable not to crash to zero worth.
Crypto makes sense as a speculation, and also as an alternative to cash where you want to avoid government and private interference in transactions (but don't mind potentially losing privacy as all transactions are public).
For example Paypal can freeze your account or the Government can freeze your bank account, but "One does not simply confiscate bitcoin".
Unlike existing systems where you have recourse to recover your payments if anything goes wrong, blockchains leave you hanging and at risk of fraud and even simple coding mistakes, thereby opening up financial services to the modern-day robber barons of the world -- and less efficiently than ever.
Thus solving payments, once and for all. ONCE AND FOR ALL.
Less tongue in cheek, here I was naively hoping we'd gotten over all this. Twelve years of attempts to advance this technology with absolutely no break-out successes, but hundreds of high-profile seemingly obvious failures.
Alas, sounds like we're winding up for round 2.
We owe it to ourselves to keep clear language available to talk about the concept of secure, private information storage and transmission. Blockchain is cool, but it's a very distinct concept from crypto.
Bankless Newsletter & Podcast: https://bankless.substack.com/ The Defiant Newsletter: https://thedefiant.substack.com/
I remember when building on or investing in Linux was a waste of time because it was a toy and would never be used for anything serious. The truth is, things are still very early — the internet has its roots in the 1960s, we are perhaps where the internet was sometime in the ‘80s with crypto (still an accelerated timeline!). Be very cautious of extrapolating from what can be done now (in crypto, quantum computing, biotech, AI, wherever). Unless you’ve spent months or years researching and piecing things together and know what is actually possible, it’s just possible that there are aspects that you don’t fully appreciate.
The idea that nothing novel or useful is going on in cryptocurrency is intellectually bankrupt.
Here are two recent links that I think show some of the cool work going on in Ethereum
https://medium.com/molochdao/the-state-of-optimistic-rollup-...
https://gitcoin.co/blog/gitcoin-grants-round-5-funding-our-f...
As I posted at the time (https://news.ycombinator.com/item?id=22913860) - talk is cheap, let's see where they put their money before we compliment them. I guess we've seen it now.
The core idea of LBRY is to make YouTube-like experiences possible without Google (alternatively, to fix the discovery, incentive, and legitimacy problems of BitTorrent).
https://lbry.com (consumer portal)
https://lbry.tech (tech portal)
https://lbry.tv (web app)
We were also just mentioned on HN in Andy Baio's article on Deep Fakes: https://news.ycombinator.com/item?id=23011445
Obligatory: http://www.cryptoisnotcryptocurrency.com
There's a lot of important problems in (and around) cryptography that need solving.
To be charitable: Maybe some of them can be solved by cryptocurrency projects? There is some precedent here. (Zcash advanced the state of the art for non-interactive zero-knowledge proofs and pairing-based cryptography, Monero demonstrated real-world ring signatures, etc.)
But more importantly: There are a lot of possible solutions that need an incentive to be developed, and could potentially become profitable start-ups.
But it's sad to see that cryptography (a.k.a. the real "crypto") isn't even a seat at the table calling itself "Crypto".
Just not by this fund, which has nothing to do with cryptography or, for that matter, virtually any normal business.
It would be a little like that, if the funds were called "Distributed Consensus Fund II" (or some common abbreviation thereof).
> Just not by this fund, which has nothing to do with cryptography or, for that matter, virtually any normal business.
And thus, in my mind, it should be named appropriately. The current name is wrong.
So pick a problem, wrap a coin around it, and profit.
I see what you didn't do there :D
n.b. The ‘solve the underlying problem’ step is optional in all blockchain projects, and is generally omitted entirely.