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Comment by dekhn | Hacker News Reader

My question is why Y Combinator funded anything related to web3 and why it seems to defend these ideas when they are attacked on HN.

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Fear of missing out. Bitcoin was the best investment ever (remember the 10k coin pizza?) and now everyone trying to re do it.

More money > money

Because investors as a whole cannot know more about a product than the people who have to build and use that thing every day. Being financially invested in it requires them to have a certain level of optimism about it even in the face of reasonable doubt.

No one can say for sure how the entire thing is going to turn out. As investors, there's no harm in placing multiple bets as long as a small number of those bets end up giving an outsized return.

Fear of missing out. A lot of people are very confident that it will blow up.

web3 is a gold rush. It doesn't matter if it succeeds or not, you still win by selling shovels. That's what all web3 companies and web3 investors are ultimately doing.

Well, money.

Very early in bitcoin I had the opportunity to mine, but I didn't do it, because while I felt it would make money, it would be a net-negative for the world (IE, I'd get richer but the world on a whole would be poorer).

Some VCs don't invest in things they think are net-negative even if there would be a big profit.

Some, sure.

Personal theory is that it's becoming obvious that the VC model is very limited, i.e. it largely works in sectors where you rapidly scale up a product with zero marginal costs of production which is pretty much only software, and they've run out of social networks to fund.

In other sectors be it healthcare, construction, anything involving people or the 'world of atoms' as Thiel liked to put it things aren't going that great. Web3 seems increasingly the only thing to throw billions at.

when I worked at a VC (well, volunteered) I recall the tech investors looking at the health investors and boggling. "You ... want ... us ... to ... do ... what?" "Invest in a company and wait 20 years for it to go out of business? hell no, we invest in 10 companies, 9 fail and 1 makes a billion in their first year"

> when I worked at a VC (well, volunteered)

Sorry, since you mentioned I have to ask: Why volunteer at a VC? Shouldn't they have plenty of capital to pay you with?

The invites to parties, intros to founders, the opportunity to help guide large monetary decisions, and insane amounts of competitive intelligence (VCs dont sign NDAs and founders are often willing to say a lot) were the compensation. Also if I'd ever want to start a company, I'd know exactly what to say and to whom.

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