Ask HN: What happened to Web3 startups?
I guess most of them still have some runway left with the VC or ICO money they raised. How is it to work at such a place after the hype and after the sentiment turned negative?
She keeps a tally of all the scams. The total is now over $67 billion.
> Now, it's happened again, and some reports are throwing around even more massive numbers like $42 billion. In reality, the exploiters were able to mint massive quantities of tokens on multiple networks, with their wallet balances showing numbers in the billions. However, complete lack of liquidity for these tokens meant their "billions" are worth substantially less.
> According to crypto research firm Beosin, the attackers have so far cashed out around 5,196 ETH (~$10.1 million) in liquid assets. Poly Network suspended services shortly after the attack.
Unbelievable hahaha
web3 is 100% blockchain/NFT stuff (aka scams and ponzi schemes) and 0% decentralised internet infrastructure.
Also, internet infra is already decentralised.
</sarcasm>
For one small example I literally get daily value from Copilot and happily pay for it, and there is much more beyond this. I've never once gotten meaningful value from web3.
But the people that previously sold scammy web3 stuff did move on to peddle scammy ai stuff.
Unrelated, but I don't think AI is a scam.
Besides investment cash flow, I don't think there have been any revenue generating ventures that cater to customers outside the Web3 ecosystem.
The true web3 players will be traditional finance companies upgrading their settlement systems.
I am curious how people will answer your second question.
That happens in the US this month, but it has nothing to do with crypto. The Federal Reserve System is launching FedNow, a 24/7 instant settlement system which obsoletes middlemen such as Zelle, Paypal, and Venmo. This is like Pix in Brazil, SEPA in the EU, WePay in China, etc. - a fast payment system run by banks and settled through central banks.
It's much like FedWire, but faster, cheaper, and for smaller amounts. You buy houses with FedWire; you buy dinner with FedNow. It's an inter-bank system, like Visa; you have to have an account with a bank to use it. Chase and Wells Fargo are on board, but Bank of America is not.
This will bring the US up to date with the other countries that have national payment systems.
Anybody in the US involved in moving money around needs to get up to speed on FedNow. Fast.
Solana is the largest of the cheap/fast networks - I’ve worked in Solana for a year - but Aptos and Sui also have solid tech.
You use Safari on your iPhone and unlock your wallet with FaceID.
Right now physical stores that take USDC are generally luxury goods marketplaces, physical art galleries, and PC hardware marketplaces.
No you can’t cancel transactions after you’ve made them, however there are escrow services that provide similar facilities for a small fee.
No it’s proof of stake so the environment is fine.
Personally I jumped into Linux when it was a joke and everyone used Solaris, Python when it was a joke and everyone used Perl, and virtualisation when nobody would ever use it outside testing. I know I’m early in crypto. I hope it will work out but there’s no guarantees on anything.
You mean Solana which has to take its network offline every two weeks or so [1] because it can't cope with yet another error/ddos/misconfiguration/what not?
[1] exaggeration.
Transactions take a few seconds. They must finish within 20 seconds or they time out, and they're expected to take much less time. Here's a technical overview.[2]
The bank to Fed to bank API uses IBM MQ and ISO 20022. These are a bit dated but widely used in the financial sector. Down at the bottom, it's XML.
[1] https://www.frbservices.org/resources/fees/fednow-2023
[2] https://explore.fednow.org/resources/technical-overview-guid...
> Certificate-Based Authentication
Heh, so I can look forward to the biennial banking outage as they forget to renew their certs :-D
But in seriousness, I have some experience with x509 auth from the early days of kubernetes using it and unless the system has some robust CRL mechanisms I look forward to knowing how such a scheme will deauthorize users
Interestingly, they also seem to be doing belt-and-suspenders since the messages themselves are signed with the private key of the institution, which appears to be registered out of band from the system itself
So exactly like crypto except US specific.
Afterwards, if it's anything like SEPA, aside from my joke "bag of potatoes" comment, everywhere. In Europe you can make SEPA or SEPA backed transfers almost everywhere.
The current "same day" ACH schedule is that payments that make into the day's batch must be received at the Fed by 4:45 p.m. ET, a target file distribution time of 5:30 p.m. ET, and a settlement time of 6:00 p.m. ET. It's all batch files.
Anything that re-bills periodically will remain on ACH. ACH handles requests to debit someone else's account with ACH, and they can undo that later. That runs on a 3-day cycle. FedNow has to be initiated from the money sender end.
1000%. The one place where I think blockchain and crypto can have real utility is from large, legacy financial institutions upgrading their very, very, very antiquated backend settlement technology and processes.
Of course, backend enterprise tech is pretty "boring", and the transition will take many years/decades given that our existing financial system currently depends on these old settlement systems that are based on manual, file based-processes from the first half of the last century. This is not the kind of technology transition likely to attract celebrity endorsements or bubblicious "crypto towns" like Miami and Austin.
And what is the actual utility beyond just the (usually unnecessary) upgrade?
https://defillama.com/fees/ethereum
The reason why protocols are able to generate cash flow is precisely because there is demand for blockspace by customers.
large multinational brands are dropping nft collabs often right now - adidas, tons of high fashion, etc. & many other other big brands are working on them behind closed doors
i don't think it's going anywhere, and most people are just building out tech and infra
I don't doubt that most of the "NFT Drop" things are worthless money grabs, but my point is that the tech is still darling to tons of corpo execs, and so lots of people in the industry are still getting $$$ to make cool things :)
But how much revenue is this pulling in? Are you profitable after 5 years?
I left 15 months later, but they're still going, just did an alpha release.
Because of my work being present on GitHub, I've been contacted by recruiters over email for similar positions several times this year.
I went to two conferences on blockchain and zero-knowledge. Everyone at these conferences seem like serious people working for funded companies, and everyone seems to be okay with there being no customers. It's a little surreal.
It seems that some of the early profit makers in the space are still sinking money into the hope of a future "after the crypto winter" bubble. There is a lot of zero-knowledge hype. Some of the startups that claim to use zero-knowledge cryptography simply aren't.
They just seem to be less about what was original called “web3” and more about applying crypto to… stuff.
Nearly all Web3 startups are fully remote, so once the CTO leaves they just sort of collapse of their own accord. CEO is usually a loony.
We're in long-term, so scams and hype are something that we try to ignore as we build for practical use cases. But yes, the days of free venture money are over. These are now flowing in the direction of a different two-letter hype.
Source: I am a founder of a web3 startup that has survived a couple of crypto winters.
> Ranking in Swap#125
> No ratings
Sounds like a random dapp to push... Are you the author or related to swapping-gifts?
So it's a website that exchanges crypto tokens to overpriced gift cards. Why does this need web3? This could be 3 PHP files on a VPS.
Demagoguery instead of a direct answer about the actual business
> The other way to see the value is if you are unbanked - like a large percentage of the world
Crypto does literally nothing for the unbanked. Zilch. Nada. Zero. It's a playgorund for rich westerners.
Most people, even these that work in the sphere don’t know the answer to this question.
If you want to know about the business then check their website.
If you want to discuss crypto at large then as I said in my comment, you gotta understand the foundations and not just have an opinion.
I get the impression nobody takes the time to actually parse the word decentralization. It only means not centralized, but that applies to absolutely everything in the scheme. Somehow people get this confused and for whatever reason believe if anything is not fully centralized then all of it must be fully decentralized.
In order to achieve actual decentralization with online or web technologies consider this incomplete checklist:
* No DNS
* No identity manager
* No shared server. A server is fine so long as you are the only client that can access it as a server or other clients are currently known and prior authenticated (a peer).
* No root certificate or certificate authority or CRL.
* No blockchain
* No shared database or other shared services
Otherwise claims of decentralization are probably just scams to pilfer your data, steal your money, or mine crypto remotely using your hardware. Decentralization is still possible as I have proven it in a personal application of mine, but its very complicated and extremely different from how the web works.
DHT with either bootstrapping or literally just rip through every single IPv4 addr and see if it's a peer lol.
> * No identity manager
How do you know what your friends' phone numbers or emails are? Ask them. No centralized DB needed.
> * No shared server. A server is fine so long as you are the only client that can access it as a server or other clients are currently known and prior authenticated (a peer).
Ethereum (and many of its sibling/child evm chains) clients can run on a Raspberry Pi. It's really not that hard to run a node, and could be packaged into common usage easily.
> * No root certificate or certificate authority or CRL.
Yeah, this is the big one for sure that needs to be solved :)
> * No blockchain
What is wrong with a public distributed ledger?
> * No shared database or other shared services
Not sure what this applies to.
It is a highly centralized artifact, which is maximally self-defeating if the goal is not centralizing. When you actually achieve decentralization nobody else is storing or accessing your activity or hoarding your data. There are no public ledgers or anything to crawl or anything to screen scrape, because its on your hardware and you determine who can access it.
"Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure) but they are logically centralized (there is one commonly agreed state and the system behaves like a single computer)"
https://medium.com/@VitalikButerin/the-meaning-of-decentrali...
In my experience, it's not hard to run a node, but it can be hard to get it to sync with the Ethereum network, especially using older hardware. You need a lot of fast SSD disk space, and the blockchain keeps growing.
Also, nowadays you probably also want Polygon and maybe some other L2 nodes, since Ethereum's scaling strategy is based on layer 2 networks. And they need even more disk space..
> * No DNS
It extends DNS by mapping naming over DHT, and content addressed data to a corner of the existing DNS system (.btlink is the working example given).
> * No identity manager
Yep
> * No shared server. A server is fine so long as you are the only client that can access it as a server or other clients are currently known and prior authenticated (a peer).
It allows for a level of shared server to suit the user, to ease use. You can run your own "server" (the eventual default), or use a public or shared one to get started. Server here refers to a process that extends DNS and serves resources without having to modify existing software.
> * No root certificate or certificate authority or CRL.
It makes no attempt to modify the existing system in use on the internet. A certificate is required to serve .btlink traffic over https.
> * No blockchain
Yep
> * No shared database or other shared services
Yep (I assume a DHT doesn't count here).
[1] https://learn.microsoft.com/en-us/security/zero-trust/zero-t...
That is the Microsoft definition. The US Army is forming its own definition because aside from reliance upon cloud vendors as service providers the military owns its own infrastructure and services (OSI layers 1-7). Nobody else can claim that, so the US Army can take Zero Trust to a different level than others are afforded.
My goal is to conform to the more demanding military definition for OSI layers 5, 6, and 7. The business case is two-fold: privacy as a mandate and mitigating disruption via logic redundancy. I have an application that is 98% of the way there. I only accomplished this by either internalizing some technologies and abandoning those I could not.
As for certificates that is something you can internalize. You can create your own self-signed certificate and corresponding certificate chain necessary to make your OS and browser happy. If you don't need certificates for their actual purpose, trust authority, then all you need them for is facilitating TLS traffic. I am exchanging trust for authentication via identity and key exchange.
* No wires
* Direct brain synchronisation only
Over time, this concept will find its way into many projects. Especialy into open source projects which try to make the web a better place.
For example, as soon as browsers support a DNS based on cryptographic proofs like ENS, other technologies which have URL based identities (like ActivityPub) will automatically support cryptographic identities. Which would bring it to projects like Mastodon and Bluesky automatically.
Hacker News just generally doesn’t keep up to date because they think crypto is scams. That’s like thinking generative AI is deepfakes.
[0] https://www.forbes.com/sites/sarahemerson/2022/09/23/helium-...
It's the circle of hype... There'll be something else along shortly.
(Some of the surviving web3 startups literally seem to have rebranded into LLM startups.)
In the long run it will benefit everyone.
However we're probably entering the bull season and we'll see a new wave of web3 scam startups soon nevertheless.
We’re eagerly waiting!