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I thought that A16Z would care about its reputation enough to make sure it's fairly trustworthy when trying to "educate" people, but can someone explain this cl

I thought that A16Z would care about its reputation enough to make sure it's fairly trustworthy when trying to "educate" people, but can someone explain this claim to me: > Blockchain Can Wrest the Internet From Corporations’ Grasp In a way that doesn't involve A16Z cynically mis-representing blockchain as some people's champion. I don't see at all, how you could claim there's something fundamental to the technology that will lead to more consumer power. Does Facebook's Libra look like a great shift towards an open internet? Does Bitcoin decentralize control? Or does it hand that control to the tiny handful of Bitcoin miners and exchanges that handle practically all of the work? What this "educational" blog seems to be doing is telling you what the most ambitious claims of crypto are, rather than telling you where crypto actually is today.

rwosync 7y ago
> In a way that doesn't involve A16Z cynically mis-representing blockchain as some people's champion. That's precisely the game for these funds to keep that illusion up. They buy up a bunch of tokens in a presale discount, pump the price, and then dump it to a bunch of foreign retail investors based on inside information before the inevitable failure of the "product". A16z's crypto fund has made a killing doing just this and it's entirely legal. The SEC is only going to go after the founders and a16z will have long exited their position by the time of the lawsuit.
- brenden2 7y ago
  This is how all of SV works, and has always been. Pump up company valuations with hype, then eventually they dump it all on institutional and retail investors. In some cases the companies actually work out so they might hang on to their stock, but in most cases they get out before the companies' eventual demise.
Taek 7y ago
> I don't see at all, how you could claim there's something fundamental to the technology that will lead to more consumer power... Does Bitcoin decentralize control? Or does it hand that control to the tiny handful of Bitcoin miners and exchanges that handle practically all of the work? This is probably one of the biggest misunderstandings in cryptocurrency. Bitcoin does decentralize control, and the miners and exchanges do not have power over Bitcoin. If you control your own keys and run your own full node, then you as the full node operator get to decide what rules you operate by, and therefore what network you participate in. Efforts by miners to change Bitcoin's protocol rules can be outright ignored (and have been successfully in the past - see the BTC/BCH split), and exchanges can only exert power over entities that are directly dependent on the exchanges. Blockchains are special because they give each individual user direct control over the exact ruleset of the protocols that they use. To the best of my knowledge, no other type of network is able to give this power to users.
- verdverm 7y ago
  What about the big 5 miners acting like a cartel? That sounds a whole lot more centralized than the existing financial system. Oh, and the wealth Gap is bigger too. Bitcoin is not really decentralized. Makes sense a16z is shilling cryptos. They made bets that aren't planning out like the hype predicted. VCs are a lagging indicator for tech. Cryptocurrency is so last decade
  - Taek 7y ago
    The miners don't have power even if they act as a cartel. They can't print themselves new money, they can't redefine who owns the existing money, they can't increase the block size or force people to run new code. In Bitcoin, a single monopoly miner has very limited powers. Bitcoin is trust minimizing / decentralized despite the cartel of miners, because Bitcoin has a large number of protections against any actions the cartel could take.
    - verdverm 7y ago
      The cartel can raise fees and change the code. They own the hardware and install the software. What's to actually stop them? If the cartel decides which branch to take at a fork, the rest of the ecosystem really can't do much. Digital USD will be way more of a deal than Bitcoin. The one thing about all this I do like is that some nerds figured out how to extract money from suckers to fund basic research. No one in crypto is making revenues the are greater than their costs, except the mining cartel
      - Melting_Harps 7y ago
        > The cartel can raise fees and change the code. They own the hardware and install the software. What's to actually stop them? If the cartel decides which branch to take at a fork, the rest of the ecosystem really can't do much. See how that played out with Bitcoin vs BCash (no I won't stop calling it that). Your hypothetical threat has happened several times before that, too. With the backing of a 'cartel' headed by the former 'chief scientist' of Bitcoin no less and it still failed to hijack the Network/protcol like you think would occur. Fees are not determined by a single entity, but rather a priority based system determined by the allotted space in any given block and the desired time/fee between the next block being created from the txs in the mempool; so while it can raise the tx costs for a short while, which clog the mempool and slow low mining fee based tx, it cannot itself cause a hostile take over to take place--Jihan and Ver tried this very tactic and spammed the network, in hopes of making users migrate to the bigger block chain they created and it ended up costing them immensely in the end, causing the former to be ousted from his company and losing its dominate hashing power. A record of a valid blockchain, and thus all of its transactions, exists throughout the entire network to self-validate in a decentralized consensus system between miners, nodes, users; forking it would require an adoption of not just miners magically adopting a new protocol/chain with the fork (Bitmain had a majority of the hashing power on BTC's network) but also the nodes that validate the txs and issue new coins. The culmination of all of these events gave Nash's Game Theory an empirically proven usecase when those nodes refused to follow the majority hashing power, several big businesses/exchanges and formally reputable members of the community and instead remained with Bitcoin Core's original chain. > Digital USD will be way more of a deal than Bitcoin. This is exactly the only kind of mindset I would expect to ever be able to draw these type of erroneous conclusions... never mind the fact the USD is actually already technically digital. Physical cash accounts for such a small percentage of actual tx volume and total currency in circulation [1] most of it exists in ledgers as 1-0s on servers and databases. A printing press is a mere relic of 19th/20th century's perception of what currency is and bares little to no relevance in the Modern World. And that is actually not a good thing, but I'll spare you the History lesson. Its like you're truly incapable of understanding the paradigm shift that is occurring before your eyes, and instead you avert your eyes away to what you think you understand and make unsubstantiated claims that clearly reveal you don't have the slightest understanding of the topic at hand given such a statement(s). > The one thing about all this I do like is that some nerds figured out how to extract money from suckers to fund basic research. No one in crypto is making revenues the are greater than their costs, except the mining cartel Exchanges. Binance makes WAY more in fees than any single miner on the network ever since Bitmain failed in their coup. Again, stop and actually learn about the ecosystem you are trying, and failing miserably, to criticize. I'd be way more understanding if you simply said you don't comprehend it, but to make these easily refutable arguments about the USD and its superiority, or any fiat currency in existence to date, doesn't instill any confidence in you even having the slightest grasp of what you are talking about. I try my best not to be seen as hostile, as no one can understand everything, but this narrative is quicly repeated and accepted as truth around here that its startling to see (mainly) professional tech people make these simply mistakes and no one tries to correct the misinformation at all. 1: https://www.marketwatch.com/story/this-is-how-much-money-exists-in-the-entire-world-in-one-chart-2015-12-18 https://www.marketwatch.com/story/this-is-how-much-money-exi...
ashtonkem 7y ago
The idea that one of the VCs who spent decades investing in such corporations would magically help us save the internet from the very companies they invested in is genuinely laughable.
cryptica 7y ago
The future use case will be to use a cryptocurrency as an alternative to company shares. In 50 years, nobody will be using NASDAQ or NYSE to by shares of companies. Company shares themselves will not exist, there will only be cryptocurrencies and decentralized exchanges. Investors will be paid as capital appreciation through token buybacks. There are several major financial benefits for this: - Capital appreciation resulting from token buybacks is not taxed. - The price of a token accounts not just for the value of the output of its community but also the value of its input since community members must liquidate the token in order to purchase goods or other tokens. Communities which produce more economic value than they consume will have more valuable tokens. It incentivizes not just high production, but also low consumption (which our current system fails to do). Communities which consume less will hold on to more of their tokens. The market cap of such communities will be more fragile/volatile but overall will grow much faster than that of those communities which which produce the same amount but consume more. This will create incentives for decentralization of wealth because there will be a growth penalty for holding a particularly liquid high-volume token. I've written a simulation which demonstrates these effect.
- ashtonkem 7y ago
  Why?
  - cryptica 7y ago
    Why do we need call options, put options, futures, ETFs, Derivatives, Credit Default Swaps, debt, etc...? They're just financial instruments which allow people to maximize the returns that they can get out of their own decisions. But unlike all these other financial instruments, cryptocurrency actually makes the system fairer, more open, more fluid and it helps to decentralize wealth as opposed to concentrating it. It also redefines the concept of wealth in a better, less black-and-white manner.
    - ashtonkem 7y ago
      All of the above let you move risk around in a different way. They solve a discrete, financial problem that the others don’t. What discrete problem does moving stocks onto the blockchain solve?
ordinaryradical 7y ago
I think part of it is that they were enthusiastic for blockchain as a backdoor into the liminal space between crowdfunding and VCs. They even reconfigured themselves legally in anticipation of this shift. I think if cryptos had worked out as they hoped, they would have been the next wave of Ventures, but without any pesky accredited investors limits, which is probably great if you're a16z—lots more opportunity to pump valuations and exit early if the things are looking bad from your board seat. So I’ve always viewed their enthusiasm for crypto as both more genuine and more cynical than they get credit for: genuine in that they really did expect this to become the new mechanism for venture investing, cynical in that it represented the perfect opportunity to introduce more bag holders to the game.

rwosync 7y ago

> In a way that doesn't involve A16Z cynically mis-representing blockchain as some people's champion. That's precisely the game for these funds to keep that illusion up. They buy up a bunch of tokens in a presale discount, pump the price, and then dump it to a bunch of foreign retail investors based on inside information before the inevitable failure of the "product". A16z's crypto fund has made a killing doing just this and it's entirely legal. The SEC is only going to go after the founders and a16z will have long exited their position by the time of the lawsuit.

brenden2 7y ago
This is how all of SV works, and has always been. Pump up company valuations with hype, then eventually they dump it all on institutional and retail investors. In some cases the companies actually work out so they might hang on to their stock, but in most cases they get out before the companies' eventual demise.

Taek 7y ago

> I don't see at all, how you could claim there's something fundamental to the technology that will lead to more consumer power... Does Bitcoin decentralize control? Or does it hand that control to the tiny handful of Bitcoin miners and exchanges that handle practically all of the work? This is probably one of the biggest misunderstandings in cryptocurrency. Bitcoin does decentralize control, and the miners and exchanges do not have power over Bitcoin. If you control your own keys and run your own full node, then you as the full node operator get to decide what rules you operate by, and therefore what network you participate in. Efforts by miners to change Bitcoin's protocol rules can be outright ignored (and have been successfully in the past - see the BTC/BCH split), and exchanges can only exert power over entities that are directly dependent on the exchanges. Blockchains are special because they give each individual user direct control over the exact ruleset of the protocols that they use. To the best of my knowledge, no other type of network is able to give this power to users.

verdverm 7y ago
What about the big 5 miners acting like a cartel? That sounds a whole lot more centralized than the existing financial system. Oh, and the wealth Gap is bigger too. Bitcoin is not really decentralized. Makes sense a16z is shilling cryptos. They made bets that aren't planning out like the hype predicted. VCs are a lagging indicator for tech. Cryptocurrency is so last decade
- Taek 7y ago
  The miners don't have power even if they act as a cartel. They can't print themselves new money, they can't redefine who owns the existing money, they can't increase the block size or force people to run new code. In Bitcoin, a single monopoly miner has very limited powers. Bitcoin is trust minimizing / decentralized despite the cartel of miners, because Bitcoin has a large number of protections against any actions the cartel could take.
  - verdverm 7y ago
    The cartel can raise fees and change the code. They own the hardware and install the software. What's to actually stop them? If the cartel decides which branch to take at a fork, the rest of the ecosystem really can't do much. Digital USD will be way more of a deal than Bitcoin. The one thing about all this I do like is that some nerds figured out how to extract money from suckers to fund basic research. No one in crypto is making revenues the are greater than their costs, except the mining cartel
    - Melting_Harps 7y ago
      > The cartel can raise fees and change the code. They own the hardware and install the software. What's to actually stop them? If the cartel decides which branch to take at a fork, the rest of the ecosystem really can't do much. See how that played out with Bitcoin vs BCash (no I won't stop calling it that). Your hypothetical threat has happened several times before that, too. With the backing of a 'cartel' headed by the former 'chief scientist' of Bitcoin no less and it still failed to hijack the Network/protcol like you think would occur. Fees are not determined by a single entity, but rather a priority based system determined by the allotted space in any given block and the desired time/fee between the next block being created from the txs in the mempool; so while it can raise the tx costs for a short while, which clog the mempool and slow low mining fee based tx, it cannot itself cause a hostile take over to take place--Jihan and Ver tried this very tactic and spammed the network, in hopes of making users migrate to the bigger block chain they created and it ended up costing them immensely in the end, causing the former to be ousted from his company and losing its dominate hashing power. A record of a valid blockchain, and thus all of its transactions, exists throughout the entire network to self-validate in a decentralized consensus system between miners, nodes, users; forking it would require an adoption of not just miners magically adopting a new protocol/chain with the fork (Bitmain had a majority of the hashing power on BTC's network) but also the nodes that validate the txs and issue new coins. The culmination of all of these events gave Nash's Game Theory an empirically proven usecase when those nodes refused to follow the majority hashing power, several big businesses/exchanges and formally reputable members of the community and instead remained with Bitcoin Core's original chain. > Digital USD will be way more of a deal than Bitcoin. This is exactly the only kind of mindset I would expect to ever be able to draw these type of erroneous conclusions... never mind the fact the USD is actually already technically digital. Physical cash accounts for such a small percentage of actual tx volume and total currency in circulation [1] most of it exists in ledgers as 1-0s on servers and databases. A printing press is a mere relic of 19th/20th century's perception of what currency is and bares little to no relevance in the Modern World. And that is actually not a good thing, but I'll spare you the History lesson. Its like you're truly incapable of understanding the paradigm shift that is occurring before your eyes, and instead you avert your eyes away to what you think you understand and make unsubstantiated claims that clearly reveal you don't have the slightest understanding of the topic at hand given such a statement(s). > The one thing about all this I do like is that some nerds figured out how to extract money from suckers to fund basic research. No one in crypto is making revenues the are greater than their costs, except the mining cartel Exchanges. Binance makes WAY more in fees than any single miner on the network ever since Bitmain failed in their coup. Again, stop and actually learn about the ecosystem you are trying, and failing miserably, to criticize. I'd be way more understanding if you simply said you don't comprehend it, but to make these easily refutable arguments about the USD and its superiority, or any fiat currency in existence to date, doesn't instill any confidence in you even having the slightest grasp of what you are talking about. I try my best not to be seen as hostile, as no one can understand everything, but this narrative is quicly repeated and accepted as truth around here that its startling to see (mainly) professional tech people make these simply mistakes and no one tries to correct the misinformation at all. 1: https://www.marketwatch.com/story/this-is-how-much-money-exists-in-the-entire-world-in-one-chart-2015-12-18 https://www.marketwatch.com/story/this-is-how-much-money-exi...

ashtonkem 7y ago

The idea that one of the VCs who spent decades investing in such corporations would magically help us save the internet from the very companies they invested in is genuinely laughable.

cryptica 7y ago

The future use case will be to use a cryptocurrency as an alternative to company shares. In 50 years, nobody will be using NASDAQ or NYSE to by shares of companies. Company shares themselves will not exist, there will only be cryptocurrencies and decentralized exchanges. Investors will be paid as capital appreciation through token buybacks. There are several major financial benefits for this: - Capital appreciation resulting from token buybacks is not taxed. - The price of a token accounts not just for the value of the output of its community but also the value of its input since community members must liquidate the token in order to purchase goods or other tokens. Communities which produce more economic value than they consume will have more valuable tokens. It incentivizes not just high production, but also low consumption (which our current system fails to do). Communities which consume less will hold on to more of their tokens. The market cap of such communities will be more fragile/volatile but overall will grow much faster than that of those communities which which produce the same amount but consume more. This will create incentives for decentralization of wealth because there will be a growth penalty for holding a particularly liquid high-volume token. I've written a simulation which demonstrates these effect.

ashtonkem 7y ago
Why?
- cryptica 7y ago
  Why do we need call options, put options, futures, ETFs, Derivatives, Credit Default Swaps, debt, etc...? They're just financial instruments which allow people to maximize the returns that they can get out of their own decisions. But unlike all these other financial instruments, cryptocurrency actually makes the system fairer, more open, more fluid and it helps to decentralize wealth as opposed to concentrating it. It also redefines the concept of wealth in a better, less black-and-white manner.
  - ashtonkem 7y ago
    All of the above let you move risk around in a different way. They solve a discrete, financial problem that the others don’t. What discrete problem does moving stocks onto the blockchain solve?

ordinaryradical 7y ago

I think part of it is that they were enthusiastic for blockchain as a backdoor into the liminal space between crowdfunding and VCs. They even reconfigured themselves legally in anticipation of this shift. I think if cryptos had worked out as they hoped, they would have been the next wave of Ventures, but without any pesky accredited investors limits, which is probably great if you're a16z—lots more opportunity to pump valuations and exit early if the things are looking bad from your board seat. So I’ve always viewed their enthusiasm for crypto as both more genuine and more cynical than they get credit for: genuine in that they really did expect this to become the new mechanism for venture investing, cynical in that it represented the perfect opportunity to introduce more bag holders to the game.