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A16Z is re-registering as a financial advisor, renouncing its status as a VC

• seibelj 8y ago
  A16Z’s unapologetic bet on cryptocurrency and blockchain companies is big for the industry. As crypto heats up again and blockchain 3.0 projects emerge (Cosmos, Polkadot, Ethereum Proof of Stake) VC will help legitimize the industry.
  • googlemike 8y ago
    Can you provide a single problem where the right solution space is blockchain? Ive thought about this a good amount, and cannot come up with a single use case where current established centralized technology is not a better solution.
    • QuackingJimbo 8y ago
      Seconding this request. Whenever I ask a crypto bull this question directly they just call me an idiot without providing any actual examples.
      • zhoujianfu 8y ago
        Illegal stuff?
        • Waterluvian 8y ago
          This is where I've landed too. 1. Making money by trading fun bucks. 2. Anything where you need a currency but all the way better options aren't viable (crime).
          • tyre 8y ago
            For (2) one of the real values is being able to carry (practically) unlimited cash with you. Right now, USD in cash is capped at $100 notes to make it inconvenient to move large quantities. With crypto, you fly anywhere in the world with a private key in your luggage. That key could have $100 or $1,000,000,000. Thinking of international drug smuggling, one serious problem is moving all of the cash out of the country. Crypto solves that easily.
      • rtpg 8y ago
        There is a legit use-case in micropayments with certain crypto implementations that don't share the blockchain's massive centralisation (what else do you call "every transaction has to be accepted on one shared append-only log"?), that would allow for offline P2P transactions if you have some trust. These cryptocurrency implementations along with some infrastructure would let you build a cheap low-cost micropayments system where you would just need to have some local trust. You could build out a federated payment network and build out infrastructure based on needs. All while avoiding the massive waste that comes from "everyone store every transaction ever" The problem of credit card companies and the like charging really high rates still affects a lot, and "Paypal, but federated" could help tackle this with some cryptocurrency concepts in the background. Though to be honest, I don't think this is going to happen. The communities are so focused on completely trust-free models that they don't see how they could build something extremely useful with way less cost and more utility by being more flexible on that point
        • QuackingJimbo 8y ago
          Interesting Why not just use the real Paypal?
          • icelancer 8y ago
            > Why not just use the real Paypal? Some of us are banned for no actual reason from Paypal. Some others, banks.
          • brian_cloutier 8y ago
            Paypal micropayments cost 5% + 5 cents. cryptocurrency micropayments could potentially be much smaller. What if you could pay per packet the wifi access point forwards for you? Or pay per watt some charger gives you? Maybe nanopayments is a better name for them.
            • QuackingJimbo 8y ago
              Re Paypal cost, is that micropayments to businesses? I just sent my friend $0.01 and it was free, with a linked bank account. Understood that the bank account payments take a while to settle but we're talking about micropayments so settlement time doesn't really matter Fair point about nanopayments. But what's the win? Why split up the cost per single watt or packet? No one cares about losing one cent per day due to rounding errors
    • seibelj 8y ago
      I have also thought about this a good amount, and the answer is any place you want a market. Markets are a very interesting thing, and when they exist all sorts of things happen, but especially real time price discovery. What digital assets enable are markets around digital goods. Software can be funded and operated using new tokens specifically for that project. I believe it can be one solution for financing and creating real gains from open source.
      • googlemike 8y ago
        Agreed that markets are very interesting, and agreed that real time price discovery is a thing that happens in markets... But I still fail to see how blockchain is relevant here? A centralized system for managing supply and demand equilibrium through dynamic price changes seems like the best system here. I do not feel as though have answered my question - would you mind expanding on your answer?
        • seibelj 8y ago
          Blockchain allows you to run certain types of programs in a purely decentralized manner. You can create a smart contract and allow anyone to use it, and pay for its operation, forever into the future without maintaining any infrastructure. The user pays. The use cases are novel and not necessarily directly applicable to current problems, just as the Internet was novel and required entrepreneurs to invent new business models. But let’s imagine you created a new protocol for email. You decide that all emails in the new protocol require the use of a token. You are now incentivizing early users to bootstrap, improve, develop, and promote the protocol. What was previously unfundable is now profitable. I’m only scratching the surface, but with some imagination you can see how “not crazy” this is.
          • epanchin 8y ago
            Much easier to charge users using their own credit cards. Don’t see what crypto is solving here? In your email example, what is the advantage to you over charging a subscription? How do you create ongoing revenue?
    • troquerre 8y ago
      Handshake.org decentralizes the root zone and obsoletes certificate authorities. Basically, it lets you register new TLDs that are censorship-resistant, seizure-resistant, and tamper-proof.
      • jasonvorhe 8y ago
        At the expense of no one getting do your site because they don't use a custom DNS server?
        • monsterbash506 8y ago
          Opera and Brave are integrating ENS (ethereum name service) into the browser so you can resolve .eth domains. There is no fundamental reason why this couldn't happen for handshake (cool project btw).
        • troquerre 8y ago
          The alternative is having your domain shut down for “sensitive” content in pretty much any country outside of the US and Canada.
    • 3mtj20 8y ago
      why not payments...which is what bitcoin was founded to do (though perhaps has moved too much into store of value territory)
      • deleted 8y ago
        [deleted]
      • RhodesianHunter 8y ago
        AFAICT none of the blockchain tech has the ability to scale to the volume of something like Visa due to it's decentralized nature.
        • 3mtj20 8y ago
          There are some solutions like lightning network. Also, no one is saying that blockchain in its current state solves all problem better than what we have now. What matters, and why some people would bet on certain blockchains/tokens/projects/etc is the belief that there are certain projects that have real potential to disrupt a big incumbent like Visa.
        • josephg 8y ago
          I'm not convinced that there are essential technical reasons stopping decentralized systems from scaling into the 10Ktps range that we would need to compete with VISA. We would have to make a few changes though - we couldn't send all transactions to all nodes - instead we'd need a tree of confirming networks or something. And we might need a 2PC protocol for transactions. (Eg first I send money and generate a hash. Once thats been confirmed you can commit a receive money message. Or something like that). But I acknowledge that the burden of proof is on me here. And I'm not convinced its worth doing - I agree that there aren't many good use cases for this.
      • rococode 8y ago
        As with other blockchain techs, the question I have for this is: is using bitcoin for payments superior enough to replace current payment systems (credit cards, PayPal, bank transfers)? My gut feeling on this is no, having used it with some frequency over the past 7 or 8 years, and I've yet to hear a really convincing argument about why Bitcoin is so much better.
    • garmaine 8y ago
      Anywhere where there is no trusted intermediary, or their fees are too expensive. (And yes that’s a much smaller space than the block chain hype machine makes it out to be, but it is something tangible.)
      • QuackingJimbo 8y ago
        > Anywhere where there is no trusted intermediary, or their fees are too expensive Such as......?
        • garmaine 8y ago
          Extremely common in international transactions, to name one space I work in.
          • icelancer 8y ago
            Not sure why you are being downvoted, this is a very obvious use case for large sums of money transferred internationally, especially in certain jurisdictions.
    • elliekelly 8y ago
      When it comes to laundering money and ponzi scheming cryptocurrency is second to none in terms of cost, risk & speed. Edit: Strugglinng to type on my phone.
      • QuackingJimbo 8y ago
        You got me there. I am in the 99th percentile of crypto bears but I myself have used Bitcoin very effectively to buy illegal drugs, buy illegal steroids, and bet on sports illegally. Bitcoin is truly second to none in these domains.
        • 3mtj20 8y ago
          If you're doing those things because you think your transactions are anonymous...you're putting yourself at risk. Bitcoin is not private, like at all.
      • seibelj 8y ago
        You are 100% wrong! Traditional banks have order of magnitude more fraud than crypto, and the nature of blockchain makes it extremely easy for analysts to trace money laundering with little effort. Google “chainalysis”
    • Mirioron 8y ago
      Transferring money from one country to another. It might seem easy right now, but if Visa or MasterCard ban you or your recipient, or their region, or country then it becomes much harder.
      • QuackingJimbo 8y ago
        Just don't get banned by Visa or Mastercard
        • icelancer 8y ago
          Oh, simple enough.
      • elliekelly 8y ago
        Every instance of international money transfer being more difficult via Visa/MasterCard than Cryptocurrency is by design. When you hear about a government issuing new “sanctions on North Korea”, for example, those sanctions are implemented by making it prohibitively difficult to effect transactions with North Korea.
    • baddox 8y ago
      I think the centralized solutions are certainly better for the people who have no major issues with the centralized solutions. That’s nearly a tautology, of course. But it’s pretty reasonable to consider there may be many people and use cases that do not work with the centralized solutions, even if those work great for you and for everyone you know.
      • peteretep 8y ago
        > consider there may be many people and use cases that do not work with the centralized solutions The comment you’re replying to is actively soliciting examples of those
        • baddox 8y ago
          Yes, and my point is that being unable to come up with examples based on personal experience is not very convincing evidence that no examples exist.
          • peteretep 8y ago
            https://en.m.wikipedia.org/wiki/Russell%27s_teapot https://en.m.wikipedia.org/wiki/Russell%27s_teapot
    • RexetBlell 8y ago
      Game items like weapons and shields in an RPG game. Imagine if there is a global database of such items and different game developers build different games around it. So you could use your items in different games. What centralized entity would you trust to run and maintain this database? What if this centralied goes bankrupt and shuts down the servers? If you are a small game developer, you are screwed. Even if it's Google, you still can't be certain that Google will not shut down the project and turn off the database like it has with certain projects in the past. A public open blockchain is a neutral database that it would be reasonable for many small game developers to use for this purpose without fearing that it will get shut down, or the rules would be changed.
      • kalleboo 8y ago
        > to use for this purpose without fearing that it will get shut down, or the rules would be changed. Looking at the hard forks in existing cryptocurrencies I wouldn't trust the rules to not change
        • RexetBlell 8y ago
          Making it hard to change the rules is one of the value propositions of decentralized blockchains. Hard forks are pretty rare and when do happen, they are contentious the original chain survives (for example Ethereum Classic). Compare this to a centralized entity like Blizzard changing rules in World of Warcraft. Wouldn't you agree that it's much much easier for Blizzard to change the rules in their game, than to change the rules of a blockchain by hard forking?
          • zacharycohn 8y ago
            But Blizzard doesn't change the rules willy nilly just to screw with you. They change it for balance or in-game economy reasons.
      • learc83 8y ago
        As a game designer (on the side) I definitely wouldn't want to give up control of balancing my game to some third party item creator. Items balance is too game specific for this to work unless you're just taking the name and some general type and implementing your own take on it, in which case I don't see much point.
    • hboon 8y ago
      Creating frictionless markets which players can more easily enter without a gatekeeper (e.g. a monopoly). The trick is to tokenize and write smart contracts representing the entities and relationships. It's a long way to go before achieving this, but we'll get there. Hopefully.
      • deleted 8y ago
        [deleted]
    • mightybyte 8y ago
      One problem that I think blockchains could be well suited for is the storage of police evidence. Not physical evidence of course, but anything that could be turned into data. There was a scene in the show Billions where U.S. prosecutors tampered with evidence in the from of notes taken while interviewing persons of interest. Since blockchains are at their core a tamper-proof append-only data store, if those notes had been stored in a blockchain that evidence tampering would have been impossible. Any time the stakes are high enough a centralized technology can become vulnerable to people being bribed, etc. Note that my use of the term "blockchain" here isn't limited to public blockchains. You most likely wouldn't want to store police evidence publicly on a blockchain like Ethereum. You'd want that to be private, but there do exist private blockchain consensus algorithms like BFT that do have the same tamper-proof properties without requiring a public proof of work network.
      • deleted 8y ago
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      • deleted 8y ago
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      • peteretep 8y ago
        Why does this need a blockchain rather than being simply cryptographic signing?
        • monson 8y ago
          Securely signing a cryptographic message with a provable timestamp still requires a trusted third party, as far as I know. A trusted third party can be corrupted.[1] Writing data on a decentralized blockchain inherently provides a secure timestamp that cannot be modified without being noticed. Not to mention the extreme costs involved with trying to rewrite a blockchain's history. [2] I disagree with the parent comment on one thing-- I would much rather trust a public blockchain with a respectable hashrate over a private blockchain. You could simply store a salted hash of the data on the public blockchain, and still keep the actual evidence private. [1] https://en.wikipedia.org/wiki/Trusted_third_party https://en.wikipedia.org/wiki/Trusted_third_party [2] https://en.wikipedia.org/wiki/Trusted_timestamping https://en.wikipedia.org/wiki/Trusted_timestamping
    • dcosson 8y ago
      IMO the original use case of just Bitcoin is still by far the most compelling. A non-inflationary store of value not unlike gold, but it can be transferred for a very low cost anywhere in the world in minutes. I think the same arguments that come up about privacy can also apply to currency - I'm not doing anything illegal, why I do I care if I'm being monitored? or I'm not buying anything illegal, why do I care if banks and payment processors can block transactions? It's nice to have an alternative and be able to do things outside of that system just in case. I don't, however, really understand the fanatics that want every cup of coffee they buy to use crypto. I definitely don't see any practical benefit to that.
      • peteretep 8y ago
        Why don’t you think companies can inflate the crypto money supply in the same way that they inflate the fiat money supply?
        • icelancer 8y ago
          I don't understand this question. Why do you think Bitcoin is inflatable as such?
          • peteretep 8y ago
            Because I don't see any reason why Bitcoin can't be a fractional-reserve asset.
            • zby 8y ago
              You can have fractional-reserve only because the public cannot see any difference between money from M0 and M1. In crypto the public uses M0 directly. For now at least. There are some M1 constructs - at MtGox there were 'codes' redeemable for bitcoins, but they are not transferable between exchanges.
              • peteretep 8y ago
    • guessy 8y ago
      Unseizable money.
      • rblatz 8y ago
        It may not be easily seizable, and with the right security practices it may be nearly impossible to seize directly. But governments could announce certain coins are not spendable and enforce that on companies or people subject to their jurisdiction. Prosecuting anyone who accepted one of those coins with a crime.
        • RexetBlell 8y ago
          Which is why privacy technology is being implemented in blockchains like ZCash, Monero and Ethereum.
        • Sargos 8y ago
          Those types of tyrannical governments already have people operating in black markets. Crypto doesn't really change that it just makes the bad government's job harder which the vast majority of the world would agree is a good thing. The people of Sudan, Syria, Turkey, and the Phillipines among others are grateful that cryptocurrencies give them an option of having freedom.
    • kwikiel 8y ago
      Blockchains are essentially paperclip optimiser machines. For bitcoin - paperclips are PoW hashrate. The network rewards people that contribute to it's growth. It doesn't care about people and people values - it's like a new kind of living organism that uses people as substrate to exist
    • rblatz 8y ago
      I’ve thought that a potential use of blockchain would be proof of ownership of certain digital items such as an mp3 or an e-book. Such a system could allow you to move purchases between devices and apps, and prevent vendor lock-in.
    • rbreve 8y ago
      Censorship free apps and content
    • eouw0o83hf 8y ago
      Real estate, particularly with regards to ownership and property title. Ownership of a property is a difficult concept to prove, and there is an enormous industry of title insurance which exists to dig through the records and insure a purchase against unknown claims against the property. A public ledger would make property title/ownership simple and knowable. Overall I think blockchain technology is incredibly over-hyped, but does have some suitable applications, particularly where public records are involved.
      • travisjungroth 8y ago
        I've heard this argument, and I don't see how it works. It relies on trusting the information put onto a blockchain.
        • eouw0o83hf 8y ago
          It most definitely does require a base trust - however that's not an argument against the solution, just a challenge to implementation. We implicitly trust a tremendous amount of digitized information because we trust its sources - for instance, digital banking works because we trust banks to only log verified transactions to our account. Sourcing that information is absolutely very difficult, but it doesn't mean it can't or shouldn't be done.
          • travisjungroth 8y ago
            Requiring trust is absolutely an argument against the solution. Once you're willing to trust someone, you may as well use a database and a contract.
      • defen 8y ago
        > A public ledger would make property title/ownership simple and knowable. Only if all the property records are already in the ledger, right? If I buy a house via blockchain, someone can still come along and say their great-aunt should have inherited it 80 years ago, before blockchain records existed. So you still need title companies.
    • geomark 8y ago
      US expat trying to receive money overseas. US banks won't serve you unless you have a US address. Many lie and say it is illegal. The usual work-around is to establish some kind of US address through a relative or friend. Still ends up being costly and slow to do transfers. Some startups have tried to address it but it is still not very good. Coinbase like to claim they have solved this issue but it is total BS because they won't let you purchase BTC on their platform without a state ID. Useless for an expat who moved overseas long ago. But if I need to be paid by someone in another country who can buy BTC then that is usually the best solution for me. It is a small market so not a driver in the crytocurrency space.
      • phillc73 8y ago
        > US expat trying to receive money overseas. US banks won't serve you unless you have a US address. I admit to knowing almost nothing about the US banking system, but is it really true that one can't make an electronic transfer using an IBAN (International Bank Account Number)? I live in Austria and just paid a number of invoices, through online banking, to bank account holders in France, Czechia, Slovenia and the UK. All I needed was their IBAN.
        • geomark 8y ago
          Of course you can make an electronic transfer, as long as you can manage to keep a bank account open at a US bank. But don't let them find out you are living overseas or they will close it.
      • seanmcdirmid 8y ago
        As long as you have social security number, some banks will do it at least. I chose HSBC USA because I was living in China and they were super used to that.
      • StreamBright 8y ago
        This is why we have Transferwise, Revolut, N26 and a bunch of others.
        • 8y ago
    • nradov 8y ago
      Synaptic Health Alliance has a good use case for using blockchain technology to share a directory of healthcare providers across multiple organizations while avoiding the free rider problem. https://www.synaptichealthalliance.com https://www.synaptichealthalliance.com
      • luckydata 8y ago
        Why do you need a blockchain to do that?
        • nradov 8y ago
          What other architecture would you recommend? There's no single entity which can be trusted to maintain a centralized database.
          • luckydata 8y ago
            I challenge that requirement. Why no single entity can be trusted? It's like saying the banking system doesn't work because no single entity can be trusted with maintaining a database of transactions. That's self evidently false.
            • nradov 8y ago
              Which single entity can be trusted? None beyond the US federal government exists today, and they don't want to do the job. I suppose in theory all of the industry players could get together and establish a joint venture or nonprofit company specifically for the purpose of creating and maintaining an accurate database of provider contact information. But that seems a lot more complex.
              • luckydata 8y ago
                Doesn't seem that complex to me. Insurance companies kinda do that already. It's not a technology issue, otherwise Google or Microsoft would have figured it out already, it's a governance and legal issue. Blockchain doesn't seem to be bringing to the table anything valuable in this case.
    • zacharycohn 8y ago
      Department of Homeland Security published this handy flowchart which NIST republished: https://imgur.com/a/RlUj9Ed https://imgur.com/a/RlUj9Ed I have found it to be very useful during these conversations.
    • brian_cloutier 8y ago
      My favorite examples both involve markets: (for the sake of convenience I'll talk about these two products as if they already exist and work. They don't.) 1. Althea (https://althea.org/ https://althea.org/) is incentivized mesh networking. Currently, mesh networking is an under-provisioned public good. It's a public good because how would you even pay for it? If you want to provide bandwidth to some mesh network you need to spin up your router and then form some sort of business arrangement with all the other routers in range. If you want to consume bandwidth from some mesh network you must first form a business relationship with every router you'll be using. With a protocol such as Althea all you have to do is start your router and set a price in $/byte . Your router broadcasts that price, and assuming the price is competitive packets will start to be forwarded and you'll start to receive payments. With Althea all of these business relationships I described before are still formed! However, they exist in the form of standardized smart contracts which are cheap and quick to create. Like in all liquid markets, there's no negotiation over terms. While incentivized mesh networking is theoretically possible without a blockchain, the transaction costs are so high that I'm not aware of any deployments. The blockchainless answer for reducing transaction costs seems to be: create some central entity which everyone signs up for. It collects information on who routed packets through who and collects and distributes payments accordingly. The blockchain answer gives you: - no intermediary who takes 20% just for matchmaking - an easy way of paying other parties - no need to sign up or register for anything. You're just communicating with your peers! 2. Filecoin is distributed file storage much like Amazon's S3. Currently, there are only a couple suppliers (Google, Amazon, Microsoft, etc) who store your files. They have some healthy competition and economies of scale which bring your price down but supply is still rather limited: mostly because there's no standardized "file storage contract". Also, they seem to enjoy premium pricing, even with all those economies of scale they manage to be most expensive options. Backblaze and some company called Wasabi are much cheaper for what appears to be the same service. Can you really trust them though? My data is important. I'll put it into S3 just to be sure. The Filecoin network goes through some crazy steps to prove that providers are actually storing the files they claim to be storing and actually replicating them the number of times they claim to be replicating them. This lets you trust any supplier on the network and turns object storage into a commodity. Filecoin also has the same blockchain benefit of requiring little registration. Do you have a desktop computer with a 2 TB hard drive, even though you're only using a few hundred GB of it? Start the Filecoin daemon and wait, after some time passes you'll have money. This 0-registration is a level of UX which blockchains cannot currently provide but in principle they could. However, it's something that would be very difficult for any central service to provide. And again, the file storage becomes a commodity without any intermediate market-maker taking x%. The blockchain acts as that market-maker.
    • aaronbrethorst 8y ago
      fleecing rubes and money laundering.
    • zby 8y ago
      Gold but for the internet. I.e. value store that is digital and government independent. It is kind of fringe niche - but I think it will stay.
    • quickthrower2 8y ago
      A means of financial exchange for countries with hyperinflation.
    • sumshetty 8y ago
      I think people look at only payments and all the media hype is around payments. A lot of things with M2M communications, be it microgrids, industrial IoT networks, self driving cars that can manage payments and invoicing themselves, blockchain networks can be very effective. Fetch.ai was an interesting project that came out. Data marketplaces are interesting, checkout numeraire and ocean network Having non fungible assets on the internet currently is an impossibility, say having a special gun in fortnite that no one else can have. This may not appeal to everyone but I know a lot of gamers who would treat these as assets. I’m not sure but I don’t think any service on the Internet today can guarantee that only one copy of a digital piece of information exists, Blockchain’s can. Current internet infrastructure depends on us trusting one organisation to manage critical infrastructure and I don’t think that’s really the optimum way for anything. Governance and management of networks was something we've never thought of, but some of the best experiment in governance are running in the crypto world. I do think networks like Google and Facebook were something people never imagined, and the capitalistic model clearly rewards the builders asymmetrically. A network like Google or Facebook was built by its users and is still being built by its users. SV has propagated this stupid ideology that 10 upstarts were able to build a network that powerful and all the credit should go to them. I'm not sure what the solution to this is, but I do think users should receive a fraction of the value the networks make. And blockchains make it possible to build networks like this. Steem is an interesting experiment but hasn't gained much steam. BAT is a great experiment that could change the direction of the internet. I'm not sure if their model would work, but I do think its an experiment that must happen. The future of the internet is at stake with the ad driven cess pool that it has become. In terms on energy inefficiency, this has been a problem people have acknowledged and have been trying to solve, I think we’re less than 2 years away from a breakthrough in PoS which would make PoW redundant. Either way, I think people obsess over payments too much. I'd obsess more over how this is the first time in the history of mankind we don't need a third party to supply trust. There is no trust premium on services, which can upend multiple services, finance being the obvious one but I think it's much larger than finance. I do think that there is a lot of noise in this space and its hard for anyone rationally observing to get a clear perspective on what's going on. I could go on all day and maybe even write a scifi fantasy but yeah, there's a lot of people working towards building the future, sadly its a small fraction compared to the number of people speculating and creating noise.
    • rorykoehler 8y ago
      https://www.idpass.org/ https://www.idpass.org/
    • devit 8y ago
      Transactions that are in violation of the law (evading capital controls, buying illegal goods, money laundering) and are not done in person. Also, replacing trust in centralized banks with trust in mostly-centralized crypto software developers and mostly-centralized majority of miners.
    • stale2002 8y ago
      Censorship resistant financial transactions. It is much more difficult to censor crypto payments than it is to censor credit card, paypal, or bank transactions. Crypto payments being censored just isn't something that is happening, even though crypto has been around for 10 years. The evidence proves that it is more difficult to censor.
      • notyourday 8y ago
        Only in a separate digital realm that never touches the rest of the world. In the rest of the world there are laws that are enforced by force and no amount of math is going to prevent a SWAT team from dragging a crypto punk into a slammer.
        • stale2002 8y ago
          Censorship is something that can be done by both the government, and private companies. It is something that happens with or without a court order, to people who have broken zero laws. Yes, the government often censors perfectly legal financial transactions, to people who aren't criminals. And crypto makes such censorship against people who have broken zero laws, much more difficult. It makes it no longer as easy as just calling up a bank, or a couple credit card companies, and telling them to cancel all of their transactions to people who didn't commit any crimes. It makes it no longer as easy as a couple monopoly companies making a quick agreement to screw over an entity that didn't do anything illegal.
          • notyourday 8y ago
            Only in the realm of digital stuff. The moment it hits real physical world it becomes clear that the entire castle is built on sand, using sand. Since we have not figure out yet how to feed ourselves and house ourselves using the crypto assigning it such attributes is rather odd.
            • stale2002 8y ago
              > Since we have not figure out yet how to feed ourselves and house ourselves using the crypto assigning it such attributes is rather odd. Of course there is a way to do this. You go to a store and pay for food with crypto if the store accepts it. Is has an advantage over credit cards, as a couple companies could block your transactions, whereas this is much more difficult with crypto. Lots of in person stores have had problems with the visa MasterCard duopoly. Being able to escape from the risk of censorship from visa and MasterCard, for brick and mortar stores, is useful in and of itself. Money is digital. And you can use digital money to pay for physical things. And you can get around censorship, enacted by private companies, using digital payments that are harder to censor, and this works for real life physical goods.
    • arisAlexis 8y ago
      public tracking of government money. public ledgers have been used since ancient Athens. This one can be tamper proof. Second public tracking of charity and how the money reaches correct targets and how it is spent.
  • threeseed 8y ago
    I really hope VCs do the right thing by the environment and stop supporting any crypto company that involves the sort of excessive Bitcoin type mining we've seen today. Whatever problem they supposedly solve does not outweigh the staggering impact to the planet.
    • 3mtj20 8y ago
      Many of the newer, high profile blockchains have moved away from proof of work to proof of stake, which is not energy intensive
  • js2 8y ago
    The Economist is skeptical: https://www.economist.com/finance-and-economics/2019/03/28/flaws-in-bitcoin-make-a-lasting-revival-unlikely https://www.economist.com/finance-and-economics/2019/03/28/f...
  • Waterluvian 8y ago
    Actual real, obvious, explainable, practical applications of crypto and blockchain will help legitimize the industry. Something seems so so wrong with the notion that, "aww shucks, we just need more VC attention! And then we'll become a real boy!"
  • jjtheblunt 8y ago
    dream on
• kkotak 8y ago
  I'm disheartened by the power wielded by so few in the American King Making Machine called the Silicon Valley.
  • r_singh 8y ago
    and their power and risk ability (affinity?) even affects businessmen trying to run sincere business for profit all the way here in India too
    • iamgopal 8y ago
      Big capital cornering resources is an age old problem. First natural resources, then large factories and now intellectuals. Rising from bottom is getting difficult.
  • trhway 8y ago
    are DC or Wall St different?
    • bpchaps 8y ago
      Does it matter if they are? The statement stands.
      • trhway 8y ago
        if a thing has generality of a law of physics ... i mean you can't be disheartened by the 3rd Newton law, can you?
      • cheschire 8y ago
        I take it as an offering of deeper perspective, especially to one who is disheartened. This is not the first, and won't be the last, group of successful people who rise to top-tier power through offering to propel middle-class folks into entry-level upper class power at great risk to society. Move fast, break things.
        • 8y ago
• 3mtj20 8y ago
  Dear Lord I hope it's 2017 all over again :)
• markdown 8y ago
  Is the title intentionally clickbaity, or does the author just not know that "blowing up" could mean two completely opposite things?
  • QuackingJimbo 8y ago
    a16z is not the object of the "blowing up". There is no clickbait or ambiguity.
• solatic 8y ago
  A18Z: "we'll submit to more SEC oversight so that we can trade like Wall Street firms" Wall Street: "Welcome to the big leagues. Ever heard of the efficient market hypothesis?"
• Alterlife 8y ago
  As a side note, I generally like reading, but I cannot for the life of me pay attention this circus of an article. The animations give me motion sickness. I see comments here which indicate there may be something worth reading in there, but my brain is screaming at me to ignore it. The whole thing feels like an advertisement. Perhaps it's because suits are making a corporate comeback.
  • QuackingJimbo 8y ago
    I truly mourn the death of the "printable version" link
  • rococode 8y ago
    Firefox has a "Reader View" that's super convenient for things like this. Automatically shows a button in the address bar on sites it supports, and it turns the page's content into a simple mostly-text view with some nice customizations: https://i.imgur.com/GJ6fW0y.png https://i.imgur.com/GJ6fW0y.png
    • sidlls 8y ago
      Unfortunately "reader view" does nothing to aid with the "rambling narrative" model that articles these days have. I read through the first half of this one before I gave up: the salient points can easily be condensed into a couple of paragraphs even with some embellishment to avoid being merely a list of facts.
• xmly 8y ago
  By stopping the investment or no-investment-for-free shares?
• ar7hur 8y ago
  a16z ("our" partner was Chris Dixon) led our seed round at Wit.ai. Working with them on a day-to-day basis was an incredible experience. They never asked for anything, but were always ready to jump in instantly when we needed anything from sales intros to offices in Palo Alto. When we got an offer from Facebook we founders wanted to accept it. They initially disagreed with us, but once we confirmed our decision they supported us 100% in the negotiation process. That's what I call class.
  • raywu 8y ago
    Thanks for sharing this.
  • navigatesol 8y ago
    >They never asked for anything, but were always ready to jump in instantly when we needed anything from sales intros to offices in Palo Alto. When we got an offer from Facebook we founders wanted to accept it. They initially disagreed with us, but once we confirmed our decision they supported us 100% in the negotiation process. That's what I call class. As an outsider, I'm curious as to how bad the VC situation is in SV that doing your job is called out as exceptional. How common are the "Russ Hanneman's"?
    • randall 8y ago
      Russ Hanneman is a pretty accurate portrayal of a combination of of any average real estate / non domain investor / rich person + the worst parts of someone like Jason Calacanis. Jason has a lot of upside (i used to work with him), but he brings a lot of "swag" which I think Russ Hanneman is based on. The non domain investor is the part where they tell you to work on ridiculous shit but have lots of money so they expect you to listen even though it's a horrible idea.
    • rattray 8y ago
      It's a good question. The VC situation _outside_ of SV is generally considered much worse as far as I know. Such that characters in the HBO show would be depressingly accurate or even lightened up a bit. There are great investors everywhere, but "a deal with the devil" can be the nature of most VC investments if you're not lucky/careful (disclaimer, 2nd/3rd hand)
• chrisco255 8y ago
  Skepticism might be warranted, but it should be noted by now that decentralized finance has a place in the present and future of our planet and it's not going away. I strongly encourage technologists to keep an open mind and do in depth research into the space. Yes, 2017 was over-hyped. The tech was not mature then, and while it has matured some since then, there's still quite a ways to go. Bitcoin Lightning network is growing. Ethereum has successfully navigated core upgrades and has a clear path to scalability. Other platforms are doing great innovative things. But to the core of the argument that crypto has no use case. It's 2019. We've seen our internet rights to speech and expression violated by companies imposing their values on their user base. We've seen digital ghosting, deplatforming, fake news manipulation, propaganda and all kinds of insidious behaviors from corporate giants that are too big to be truly accountable anymore. Bitcoin et al. are a very real promise that the future of banking and finance and money will be decentralized. Which as far as I'm concerned, is about freedom as much as speech is. You don't have any freedom if you have to beg VISA or PayPal for permission to spend your money. That alone should be enough to justify the existence of block chain technology and we should all be cheering on its eventual success. But besides that, the tech is being used in novel ways. From gaming to loans to tokenized asset trading. Cryptocurrency is programmable in a way that is just not possible with dollars.
  • deleted 8y ago
    [deleted]
  • seibelj 8y ago
    Some interesting players in the defi space: https://compound.finance/ https://compound.finance/ https://makerdao.com/en/ https://makerdao.com/en/ https://dydx.exchange/ https://dydx.exchange/ https://0x.org/ https://0x.org/
    • sumshetty 8y ago
      Nuo.network
  • bachback 8y ago
    The article doesn't say much about it in relation to a16z. There is a16zcrypto.com . I am very involved in this space, I am wondering how a16zcrypto is structured compared to traditional VC. For many crypto startups it probably doesn't make much sense to base in US.
• yalogin 8y ago
  I don’t know much about their business but I tried listening to their podcast, it was just ads for their companies and ideas. Couldn’t take it.
  • elliekelly 8y ago
    Well that will all but stop now that they’re an RIA so perhaps it’s worth giving it a second listen in a month or two.
  • xnyan 8y ago
    Agree, too much promotion. If you can get through (god bless 30 second skip) they do have some interesting guests that I have not heard elsewhere.
• jakequist 8y ago
  tl;dr - A16Z is reclassifying themselves as an "investment advisor", which will allow them to make riskier bets (crypto, real estate, etc). They'll still invest in startups like any other VC firm.
  • sdinsn 8y ago
    > which will allow them to make riskier bets (crypto Sounds like they'll blow up their wallet next
  • dang 8y ago
    Yes, that's the interesting thing here, so we've put it in the title above. Hopefully that will nudge the discussion to be more specific and less lame.
    • raywu 8y ago
      thanks dang! You rock
  • tanilama 8y ago
    > crypto, real estate Crypto maybe, not real estate doesn't sound as risky as startups.
    • simonebrunozzi 8y ago
      Maybe it depends on what type of real estate.
  • srndh 8y ago
    A totally n00b question. Isn't VC the person with the money, so they are more in control. While an "investment advisor" is just advising or suggesting where the money can be put for maximum returns like an investment advisor in banks? So, presumably less in control. I don't understand why a title change was needed. Any technical or legal reasons?
    • 8y ago
• KasianFranks 8y ago
  > venture capitalists have long traded a lack of Wall Street-style oversight for the promise that they invest mainly in new shares of private companies. It was a tradeoff firms gladly made—until the age of crypto, a type of high-risk investment the SEC says requires more oversight. So be it, says Andreessen Horowitz. By renouncing its venture capital status, it’ll be able to go deeper on riskier bets: If the firm wants to put $1 billion into cryptocurrency or tokens, or buy unlimited shares in public companies or from other investors, it can. Pitchforks and funding purism aside (forget about blockchain debates), crypto assets are here to stay. They're the new publicly traded vehicles and function as a way for new startups to raise capital from new truly global 'capital markets' along with being a valuation metric. a16z figured this out. They knew what happened with facebook in SecondMarket [1] and also knew the largest upside in shareprices (aka IPOs/exits) are dictated by a public market marketplace, not with private startups. Factor what Fidelity with $6T AUM has already released in rolling out global crypto services [2]. Separate crypto, as a capital raising vehicle and trading vehicle, from 'blockchain' and then it all begins to make sense. Real scientific and technical due diligence will help too [3]. [1] http://fortune.com/2012/05/18/facebooks-pre-ipo-pricing-history/ http://fortune.com/2012/05/18/facebooks-pre-ipo-pricing-hist... [2] https://www.coindesk.com/coindesk-most-influential-blockchain-2018-tom-jessop https://www.coindesk.com/coindesk-most-influential-blockchai... [3] https://medium.com/@492727ZED/vectorspace-ai-due-diligence-dd-guidelines-for-crypto-for-2019-aa8cea3df5f7 https://medium.com/@492727ZED/vectorspace-ai-due-diligence-d...
  • deleted 8y ago
    [deleted]
• deleted 8y ago
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• hkmurakami 8y ago
  So Hedge Funds, PE, and VC all converging into a more continuous spectrum of asset allocation strategies.
• zomadmork 8y ago
  Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, ============>> http://xurl.es/f42yh http://xurl.es/f42yh
• zomadmork 8y ago
  Start working at home with Google! It’s by-far the best job I’ve had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringing home at least $77 per hour. I work through this link, ============>> http://xurl.es/f42yh http://xurl.es/f42yh
• dzhiurgis 8y ago
  Of everyone I follow it seems it’s only a16z still believes in crypto.
  • prawn 8y ago
    @haralabob and @naval both still seem believers.
    • tomhoward 8y ago
      Also, Initialized Capital (a VC fund operated by YC alums Garry Tan and Alexis Ohanian) seem still to be big backers.
  • twidlit 8y ago
    A contrarian bet has outsized returns.
  • quickthrower2 8y ago
    What is there to believe or not believe in? It is what it is. Bitcoin is a perfectly functional means of financial exchange, and has use cases that beat regular cash, and other use case where it sucks compared to cash.
    • chx 8y ago
      > and has use cases that beat regular cash, Tell me.
      • Semaphor 8y ago
        Transferring money from one continent to another.
        • raverbashing 8y ago
          Calculate the full chain of costs then come back here with how it compares to Transferwise or other methods
• SideburnsOfDoom 8y ago
  "put a dent in the universe" ... "disagreeableness" ... "weaponizing his popular blog" ... "Being number one" A phrase from each of the first four paragraphs. Is this parody, or just pandering cliche?
• neilv 8y ago
  As a financial advisor, will A16Z have fiduciary responsibilities towards advisees that it doesn't now? (I don't know this area, other than a little small business personal finance, but I recall hearing about some fluctuation in rules about financial advisors, within the last few years.)
• rdl 8y ago
  If they're now an IA, they're not able to talk about their investments publicly? Doesn't that hurt the value proposition for startups/etc. taking money from the new a16z?
• rdl 8y ago
  Kind of depressing that they gave up on the "GPs must have been operators" rule (presumably due to pressure by LPs or the press). Do any large VC firms still maintain that?
  • mrnobody_67 8y ago
    I think Matrix still does. Lots of smaller/newer firms as well (i.e. Craft Ventures).
• TheTruth1234 8y ago
  If it looks like a duck ... Quack, quack!!!
• kchoudhu 8y ago
  Does this mean they are going to try to syndicate IPOs as well? Get your portfolio companies coming and going.
• ratel 8y ago
  Dear Gentlepeople, can I point out the Elephant in the room, or better the one leaving it. The most interesting part (especially for HN) is not where A16Z is going, but what it is leaving behind: VC. Setting aside the shift in social tide for a moment, why does A16Z think there will be no more profit in VC? Any thoughts?
  • RhodesianHunter 8y ago
    They don't, they're still doing VC. This just lets them invest in other things as well (like crypto).
    • ratel 8y ago
      That may be true, but the fact that they need the new path to make larger investments outsides of VC raises the question how much VC money will be left. Furthermore the change still implies that they think other investment opportunities might be more profitable than the one they were actually quite successful in.
• T3RMINATED 8y ago
  Conehead
• engineerworks 8y ago
  I kinda think getting rid of the VC status is better than you can encourage investment in something unethical and risky without being on the hook because "we are just the advisors, it's the person with money who takes final shot with what they wanna do with their money" I can see why it can help if the opportunities are shrinking in the legit space. Maybe the winter is finally coming?
• CalChris 8y ago
  I've had my morning coffee and it's dawning on me what this means (dawning slowly because it is quite a change). Yes, A16Z gets to extend its reach, as if investing in seed and growth stage tech companies wasn't risky+lucrative enough. Maybe I'm conservative, but I'd rather they stuck to their knitting (which they're pretty damned good at). There are downsides to this 'diversification' first and foremost, losing focus, but also risk. Basically, I can't help but think of SV's overall trend towards Too Big To Fail. I'm not a fan of crypto at all. Re-structuring A16Z so that they can bet on that seems worse than silly. Real estate? Perhaps they can bet on Chinese ghost cities as well.
• arisAlexis 8y ago
  interesting link https://a16zcrypto.com https://a16zcrypto.com
• mattnewport 8y ago
  The investment returns on the funds sounded unimpressive given the time period. I found some info online from the WSJ suggesting the first fund was on track to return around 250% since 2009. Just investing in the NASDAQ would have returned over 500% over that same period. Am I missing something here or is the performance as unimpressive as it appears?
  • pbreit 8y ago
    The article itself includes: "The firm’s first and third flagship funds, $300 million and $900 million, respectively, are already expected to return five times their money to investors, sources say. Its $650 million second fund and $1.7 billion fourth fund are expected to return three times their investment capital, good for the top quartile of firms, and are expected to climb." Selecting the NASDAQ in 2009 is a bit of a cherry-pick.
    • mattnewport 8y ago
      I don't think selecting the NASDAQ in 2009 is a cherry pick given that is when the first fund started and we're talking about a tech focused fund. Even if the numbers here are more accurate than the WSJ, that still indicates the first fund is returning on par or slightly below what investing in the NASDAQ would have done over the same time period.
      • mrnobody_67 8y ago
        Venture as an asset class sucks. Returns also tend to be inversely correlated to fund size and fund reputation. Top 5 or 10 firms generate virtually all the returns in the asset class.
      • ajross 8y ago
        2009 was the end of the biggest market drop in a half century...
  • defen 8y ago
    I had the same reaction. I've gotten better returns than A16Z over the same time period just through index funds and picking stocks of companies I like. Granted, I'm investing a tiny fraction of the amount they are, and I don't get to be a mover and shaker in Silicon Valley, but I was really not impressed by the overall return on investment.
• twakefield 8y ago
  Matt Levine's take is this is due to fact that "private markets are the new public markets"[0]. The lines between public and private markets are blurring so this is a prudent move by A16Z. TLDR; As companies stay private longer, and get bigger and raise more money while staying private: * The secondary market for private shares becomes more important. * VC's now may have more asymmetric information or more reasons to invest in public markets. * Mutual funds are competing with VCs in later private rounds so why should VCs be able to compete with Mutual Funds in public markets. * The obligatory crypto reference. Another one he doesn't touch on is maybe it's difficult to efficiently deploy > $10 billion in just private markets? [0] https://www.bloomberg.com/opinion/articles/2019-04-03/buying-the-good-stocks-can-be-bad https://www.bloomberg.com/opinion/articles/2019-04-03/buying...
• os7borne 8y ago
  Honestly, I don't understand the implications this has on their investing activities or the mechanism of this structure. I also don't fully understand the regulations around VC Funds and RIA's in USA (I'm from India). From what I understand though, a16z is trying to breakaway from investing in the limited scope of securities (e.g. equities) of private companies. They want to offer a suite of wealth management services to their Investors in addition to VC investing. But then, will the Investors pool capital in the Fund and the Fund be advised by the RIA? Or will the RIA directly advise the Investors? The structure isn't too clear to me. Apologies for the ignorance.