Comment by Comevius | Hacker News Reader

Comment by Comevius | Hacker News Reader

> There has been a major computing cycle every 10-15 years.

> We believe blockchains will power the next major computing cycle, which we call crypto or web3

> For example, with mobile computing, the golden era was 2009-11, when companies like Uber, Venmo, Snap, and Instagram were started.

> We think we are now entering the golden era of web3.

Prior cycles were pushed by demand after a key innovation (computers, internet, smartphones) changed our habits. Uber became popular because taxi companies were slow to adapt to smartphones. Venmo become popular because the banks were slow to adapt to smartphones. Snap and Instagram become popular because everyone suddenly had a camera on them.

Cryptocurrencies became popular due to distrust in the economy, but they did not prove to be a viable replacement. The dream of buying a pizza with Bitcoin is still a dream. At some point venture capitalists realized that they can pump and dump shitcoins, they just have to convince greater fools that they are useful, that they are the future. This is why we have this NFT and Web3 bonanza. There is no demand for them, they don't solve any problem, nor they try to. They are just shiny things for bagholders to look at. Rather than blockchain technology, it's distrust, desperation and greed what's behind it all.

> Cryptocurrencies became popular due to distrust in the economy, but they did not prove to be a viable replacement.

I mean BTC or ETH were a lot better place to keep your capital in the last X years (where you can pick any X since the GFC/Bitcoins inception) than keeping it in dollars or euros.

Of course some people had access to a) the free money that the US gov has been printing over that same period, b) connections to early investment opportunities , and so may have had better places to put their capital.

But for regular people who didn't have the connections to invest in AirBnB during the earlier rounds and put their capital to work (doing all the good work that AirBnB has done) it seems to have actually worked pretty well if you distrusted the economy. I'll leave it up you to work the ratio of how many people exist in those two groups.

Also this comment seems to assume that it's over and everyone trusts the economy now, and that bitcoin & crypto have failed in that use case. Doesn't seem that way to me.

You can certainly criticize the actions of VCs in the space, and a bunch of other groups, and I wouldn't disagree, but believe it or not there is people in crypto who still have the original principals, and what is more is there is a constant influx of new people with those same principals.

Replace your arguments for crypto with arguments for the internet, and zoom back to the mid 90s.

There were a ton of shady internet companies capitalizing on this sort of hype and swindling people out of their hard earned money. Beanie babies were also huge.

Do you know what else was happening? The IETF was finding its feet as an org, RFCs were being written and iterated on, the building blocks of the modern internet were being built behind the scenes, and companies like Amazon were realizing that their value was not selling books but building a massive logistic network that could compete with brick and mortar stores. Porn companies (widely seen as morally reprehensible/unsightly) were also figuring out video streaming and PayPal was figuring out how to deal with online payments.

Yet, if you read the news and weren’t building in the space, you’d probably come to the same conclusions as you are today - the internet is a fad that will die out soon because there’s nothing of substance to it and it’s all just greater fool hype.

Zooming back to today - I’d implore you to go look at the research being done right now in the cryptography space - things like zero knowledge proofs, multi party computation, and threshold signature schemes are becoming more viable as building blocks every day. Same with a shift in mentality from centralized trust to decentralized control enabled by some of these cryptographic primitives.

Is every crypto project going to be the next Google? Of course not, but the entire point of putting VC money into the space is to push the space forward as a whole (along with spurring research), eventually leading to the next Amazon/Google/Facebook/etc. and pushing humanity forward in some direction.

New tools mean fertile ground for innovation, and VCs are interested in finding and pumping money into fertile ground since they usually have massively outsized returns.

Are they always right? Nope, but Marc Andreessen was around in the 90s, built one of the first web browsers, and co founded Netscape. So if nothing else he’s seen what unrealized fertile ground looks like, and a $4.5B fund signals that he sees it again in the space. Of course a more cynical view is that he purely sees the ability to enrich himself and his fund via pump and dump schemes without caring how it’s done but that’s something that only time will tell I suppose.

The internet was just as viable in 1995. We were doing commerce over phone lines using computers for 20 years at that point. By the time there was an internet nobody had a reason to question it, or desperately try to find use cases for it.

The cryptography space has a lot of promise, but the VC money is not being pumped into better privacy or confidence (which is better than trustlessness). It's being pumped and dumped, because securities fraud is where the money is. The idea is to prop up the image of crypto until you can dump.

Blockchain technologies are not the right tool for everything. They can eliminate the double spending problem in a decentralized way, but there are trade-offs involved in being able to tolerate a large amount of faulty or malicious nodes (for problems that require coordination) and they are fundamental. Blockchain technologies lock you out of efficiently solving a lot of problems.

The Web3 projects I have seen so far would not be able to compete with their Web2 counterpart. They don't know their customers, they are hard to understand, difficult to use, they are trying to bank on artificial scarcity as if it's a new invention no one else tried. If your mother can't understand your Web3 project chances are you aren't going to get your big break.

Eventually the gamblers and gullible will run out and those already financially vested in coin of your choice who on the weekly or monthly buy $x more, also adding to and keeping a reserve of $y to buy during dips which also helps to make the price look artificially more stable than it is [not to mention when billion dollar reserves get spent to counter the bottom completely falling out]. After that it will only be through aggressive tactics including regulatory capture that force more people, let's say 50% of population adopted, they will need the remaining 50% to adopt - to give them the basket, leaving them holding it - with no one else to buy it from them.

What will, and is happening, you just don't see it as much - it's not as obvious because no one is making money or wanting to make money by taking a stand against Bitcoin, and draw the attention of the heavily invested ideological mob of HODLers - whereas everyone taking a stand for Bitcoin is financially incentivized to promote it with whatever true or false rhetoric and propaganda they find works best in the present climate; perhaps the best simplified comparison I heard is that Bitcoin is like Mary Kay for men.

a16z is really sticking to their beliefs that there must be a major computing cycle every 10-15 years, and that it must be blockchains. Personally, I think its the public cloud, but I'm not nearly as rich as Chris Dixon et al.

Public cloud was the computing cycle of the 2010s

It's still in its toddler years and growing taller by the day. Crypto fans love to tout the "early days" but bitcoin was released circa 2009 (roughly when Google Cloud Platform was introduced), and Ethereum in the mid 2010s...

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