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Crypto Fund III

56 points by TimJRobinson 5y ago

BenoitEssiambre 5y ago
Move the hands on the crypto doomsday clock a bit closer to midnight I suppose. Douglas Adams tried to warn us: "[to] revalue the leaf, we are about to embark on a massive defoliation campaign, and ...er, burn down all the forests." https://benoitessiambre.com/specter.html https://benoitessiambre.com/specter.html
- TimJRobinson 5y ago
  Crypto has evolved far beyond buying and holding digital gold. Decentralized Finance is here and it's about replacing the slow, opaque existing financial system with open, transparent, internet-native protocols. Not to mention DAO's, NFT's etc. This is what a16z is so excited about.
  - beefield 5y ago
    Could you point me to a defi project that lets me borrow some crypto even if I have none in the first place?
    - cinquemb 5y ago
      if you are a (lending) business in an emerging market (and make near $500k in loans now), you can reach out to https://goldfinch.finance/ https://goldfinch.finance/ if you are run crypto trading company you can reach out to https://truefi.io/ https://truefi.io/ and https://www.maple.finance/ https://www.maple.finance/ https://www.l2p.finance/ https://www.l2p.finance/ is seeking to aggregate all the uncollateralized lending platforms in defi now.
  - MatekCopatek 5y ago
    Has it, really, though? What percentage of worldwide crypto traffic represents paying for goods and services (or doing some kind of meaningful product interaction for non-financial applications) and how much of it is just trading?
    - bouncycastle 5y ago
      This is kind of like being on the internet in 1996 and asking what percentage of the internet is used for e-commerce and how much of it is just hobbyists making their "under construction" Geocities websites. We are still in very early stages. What most likely will happen is that crypto will start to become the "backend" of the financial systems and the regular people will be using it without even knowing it, similar to the way they use Linux powered phones now. Crypto has applications beyond finance too, some things that may end up being disrupted are art and DNS (for example)
      - imtringued 5y ago
        Or someone wakes up and fixes the current fiat system. People thought of solutions 80 years ago.
        bouncycastle 5y ago
        We can't even know the exact total amount of USD in circulation and we cannot verify ourselves how much is being printed unless we trust the few people in power. I think if we fixed that, we would already be making great strides! On the blockchain, these trivial questions are resolved with a simple database query.
      - hocuspocus 5y ago
        > We are still in very early stages. Bitcoin is 12 years old. Comparing cryptocurrencies to the early days of internet and the web is beyond ridiculous. There's still zero evidence of what will most likely happen, except for more of what we've seen so far: speculation, extortion, money laundering.
        bouncycastle 5y ago
        Did I say bitcoin? Forget about bitcoin! It's going to be a tiny part of crypto in the future. Bitcoin is 12 years old, but that's the reason why things haven't progressed as much in the last decade. We're slowly getting over speculation & wild-west phaze and moving to the next phase, and discovering many new uses along the way, which I've listed in my parent post. Why I say it's still early? Currently most of the projects are infrastructure and protocol development - kind of like when the internet was still developing. We're still on something like HTTP 1.0 and HTML 2.0 when it comes to crypto. The internet wasn't built in a single decade. It took multiple decades to get to where it is now, this is exactly the same thing playing out now. The amount of building and development is only intensifying. I'd urge you to take a look at what a16a has been investing in https://a16z.com/crypto/ https://a16z.com/crypto/
  - BenoitEssiambre 5y ago
    I kinda like NFT's actually, they're not dangerous to the economy like crypto tokens used as currencies. They're more like digitally autographed pieces, a nice way to reward artists. They do seem to sometimes be weirdly overpriced for autographs though. De-Fi is dangerous nonsense.
  - jcpham2 5y ago
    -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA256 Hi Tim, I'm a nobody who has been "investing" in and around the crypto ecosystem officially since the date on this gpg sig. Just saying thanks. Long before these markets existed and trust was difficult to define, reputation on internet relay chat was where this ecosystem was birthed. -----BEGIN PGP SIGNATURE----- iQGzBAEBCAAdFiEE9ymb1zh56GZhPqskxx+17WrOBK8FAmDUkPIACgkQxx+17WrO BK/TnwwAqKtRJFrIH5Fo/WgyYFuqG2Kkr4mhrrUbGePIpKm8BawYUeW10TOXVWhB FMPMzMMYFVG2+ZrNR2/CZlJIBFCIq/O+WWnViehxzU1JvwBz4j0zftgd7lMhk8d1 4ZElAhF2825SYJgC4KHfgWqGZ2DsvW5BbX5wnEQJBcNoIjzNv6CvUyoGiVWetNE1 HYY+rJ+H+MnC12dLLXNWcO34KTlOwCOav5Fd6TWdG8SXzxACvOn+osmD33QgzsJm z30C1sjQWWOgORwtrya9e+Ava11ZRnC0p9ajJTQDMLoPtqOof09ORCc+7srjaXb+ Y5VI8fsAD2TsinHVuqCvcfz16vZ3oO2FOWG6XVmMfb4TN80S8QACqIfifokxUy9C 8G8Rnjyu4bLMW4cynqpAnX4hZprh3myJpXKwt5WD2AbZPUXUbSMV9LT5jzftyp9U ng25A+3KToYPx5RbVtdQ/SNGq3XJaiUWC9vzWHBGWy4FH4mV6DP44FJfbtDP4nJL 5ZZM7Pay =q2p1 -----END PGP SIGNATURE-----
- bouncycastle 5y ago
  The article you linked has a poor understanding of what cryptocurrencies are. First, understand that cryptocurrencies are not just money or currencies. Crypto-assets are programmable and allow many different applications, it's not just limited to purchasing transactions. Realize that there may be many different types of crypto-assets. Some will allow voting & governance, some will have price-stabilizing incentives built in, some will be inflating and mimc fiat, while others will be programmed to mimic gold, some will be interest bearing, some will be non-fungible, some will be a mixture of various properties and incentives. The term "cryptocurrencies" is really misleading.
- prestigious 5y ago
  I don’t understand the analogy you are trying to make.
  - SkyMarshal 5y ago
    Yeah, the “defoliation” analogy seems the opposite to what is actually happening. The creation of many cryptocurrencies is akin to money supply inflation, not deflation.
    - BenoitEssiambre 5y ago
      Well as long as the ecosystem is constantly creating new tokens in proportion to the growing economy sure, things should be fine. A deflationary coin becoming mainstream and dominant is what should raise red flags. I don't see a lot of crypto people working to prevent it from happening.
- topaz0 5y ago
  Note that the main insight of this blog post, that recessions are caused by a society-wide preference for hoarding money rather than goods, is an insight that dates back to Karl Marx in the early 19th c. Earlier economic theorists had thought that recessions characterized by a general lack of demand were impossible in capitalism because every exchange supposedly involves items of equal value, but that fails to account for the asymmetric demand for money, due to its liquidity (and therefore relative lack of demand for goods/services).
  - BenoitEssiambre 5y ago
    yeah, it's liquidity and network effects from people using it as an intermediate asset in every other transactions (instead of bartering directly). I didn't know Marx saw it that way. My inspiration comes from market monetarists of the Milton Friedman tradition.
    - topaz0 5y ago
      There's a lot of good stuff in Marx, whatever people say (and downvote). Whether or not you agree with the solutions he proposes.
dannyw 5y ago
Starting to invest in crypto projects and companies during the onset of a bear market (below 200D MA, after death cross) is a smart move. This seems like a good time to embark on crypto projects, even if we have an upcoming winter. The coolest thing would be if a16z crypto believed in open access as well, and allowed all accredited investors (due to legislation, unfortunately) to contribute a modest amount.
- cinquemb 5y ago
  They could to some degree if they also publicly disclosed investments in decentralized incubators/funds (if they made them).
glutamate 5y ago
Of course A16Z is enthusiastic about the creation of a financial system not subject to democratic oversight.
- sneak 5y ago
  …and entirely opt-in.
- timdaub 5y ago
  To me that's a surprising premise and an even bigger surprise in the conclusion. What makes you think A16Z wants to create a financial system without democratic oversight?
- prestigious 5y ago
  I know I am!
- SkyMarshal 5y ago
  Our current financial system has, at best, only a veneer of democratic oversight, evidenced by decades of deregulation and the inability of the government to sensibly reregulate it after the GFC. The banking system pretty much owns politicians cradle-to-grave - you need massive political donations to get elected, then lobbyists have super-access to politicians while in office, then politicians are offered lucrative revolving door jobs and board seats on leaving office.
  - glutamate 5y ago
    Agree. crypto will not fix any of that.
- sergefaguet 5y ago
  A lot of people are excited about that. For good reason too. The very idea that two people exchanging private value should be subject to “democratic oversight” is a totalitarian nightmare.
schaefer 5y ago
If we can talk semantics for just one second, it feels like its been ages since the word "blockchain" was coopted from being a technical term into a hype inducing buzzword. So, it's nice to see someone gently set down the word and use another phrase. In this case "crypto network".
seibelj 5y ago
Crypto is an area of startups that HN collectively is wholly ignorant of because of a rabid and devoted group that despises anything related to blockchain and crypto. It has driven crypto enthusiasts away from commenting, allowing the downvote brigade to take over. There are deep-pocketed investors, talented developers, and very intelligent people in this space (but you won't find them commenting here).
- 3pt14159 5y ago
  Because we do not see the value. I was into crypto really early and I was slowly more and more disgusted what it supported in society. Constant exit scams, criminals using it evade the law, etc. And on the other side, you had to be so freaking careful to actually use the thing yourself without losing all your money. Hardware wallets, backup passwords, whatever. It's not cool to worry about whether or not you still have your hundreds of thousands of dollars or not. It's not fun trying to figure out if you can trust Coinbase or if they're the next MtGox. And besides, if you're trusting one of these players anyway then what is the point? Wasn't this supposed to be about privacy and getting away from centralized banking in the first place? I just don't see any upside. I made my 200x return or whatever it was and I'm out. If I start to see actual products solving real problems that honest citizens in non-sanctioned countries have, I'll revaluate my position.
  - bouncycastle 5y ago
    "non-sanctioned countries"? The majority of citizens living in sanctioned countries are honest and have their country sanctioned against their will, but cannot say anything against their government. Why should they get punished for something that's due to their plight? They deserve freedom like all human beings. Anyway, I think the real danger is if our societies move to 100% cashless. Crypto provides a good counterbalance where we get to retain the benefits of cash while going electronic - if you're looking for any benefit, I think this is it.
    - 3pt14159 5y ago
      They do deserve freedom in a broader sense, yes, but the world is unfortunate and sanctions are how we discourage war. Most of the time sanctions are targeted to individuals or corporations, but there are cases where it is country-wide.
endisneigh 5y ago
> We believe that the next wave of computing innovation will be driven by crypto. We are radically optimistic about crypto’s potential to restore trust and enable new kinds of governance where communities collectively make important decisions about how networks evolve, what behaviors are permitted, and how economic benefits are distributed. That’s why today we’re pleased to announce a new $2.2 billion fund to continue investing in crypto networks and the founders and teams building in this space. This represents the beginning of an exciting new chapter for the a16z crypto team. Can somehow explain to me exactly how crypto will do this without intermediaries? If there must be intermediaries then why do you need crypto? - How can crypto "restore trust"? - How can it enable "new kinds of governance" - unless "new" means Plutocracy? - How can any economic benefits be distributed when by definition cryptocurrency holders are accountable to no one (something like a redistribution of funds would eventually require either an intermediary in which all holders are beholden to, or voting, however in either case that's the exact scenario you're in if you hold fiat in a democratic country so I'm not really getting it).
- epistasis 5y ago
  > How can crypto "restore trust"? For people with very poor understandings of economics, and have drunk deep from the sacred texts of Zerohedge, that have been standing on a wooden box on the street corner for the past decade preaching about the evils of the coming wave of inflation, as the Fed struggles mightily to be able to even get inflation up to the 2% target, much less above it for any period of time, crypto is the savior to get us away from fiat money.
  - JohnJamesRambo 5y ago
    Maybe I just shouldn’t read Hacker News anymore.
    - 71a54xd 5y ago
      We should all ask ourself this question more often ;)
    - 5y ago
mis1988 5y ago
A16Z: "It's time to build" Also A16Z: "We're raising (another) crypto fund"
qayxc 5y ago
I don't quite understand. So they say: > We believe that the next wave of computing innovation will be driven by crypto. But then they also say that [0]: > Crypto is purely a software movement and doesn’t depend on a hardware buildout, in contrast to, say, the internet, which required laying cables and building cell towers That doesn't make any sense, though. Crypto heavily depends on specialised hardware (ASICs, GPUs, SSDs, ...) and existing network infrastructure (have fun trying to establish crypto in underdeveloped countries). I get that products are just based on software and that infrastructure is provided by 3rd parties, but so far very little has come out of crypto in terms of "innovation in computing". Just a random pick of their investments, ARwave [1], reveals actual regression, not innovation: > The maintainers of the network are able to filter and screen the transaction in whichever manner they choose, checking against known illicit material, scanning the data with computer vision software, et cetera. So basically "store data forever, decentralized, no more 404s, no stealth edits, blah", but also "we decide what's actually going to be stored and reserve the right to censor your data however we see fit". Honestly, I don't see the innovation in that. Most of the other investments are either NFT market places or crypto-based trading platforms. Again, not really an innovation in computing. Maybe I'm just too illiterate when it comes to decoding marketing speak. [0] https://a16z.com/crypto/#vertical-landing-investment-thesis https://a16z.com/crypto/#vertical-landing-investment-thesis [1] https://www.arweave.org/technology#papers https://www.arweave.org/technology#papers [2] https://www.diem.com/en-us/ https://www.diem.com/en-us/
- testific8 5y ago
  I agree with most of what you've said, but some cryptocurrencies use proof-of-work systems (like RandomX) that truly are ASIC/FPGA/GPU-proof by design.
- megameter 5y ago
  The 90's dot com gold rush is the rhyme to the crypto gold rush. Lots of talk about ecommerce, revolutionary tech, etc. The 2000's saw the sobered outcomes: ads, ads, ads. All the apps were just conduits to adtech - very wide marketing funnels. Nearly all the actual services had been demonstrated before in a non-monetized, pre-Web context. A16Z is correct in saying that the dot com boom had a major build-out aspect. It needed broadband deployment and intensive consumer marketing. Cryptocurrency has so far demonstrated itself to be more like a bottom-feeder on hardware resources; hardware not being used for something obviously more valuable gets repurposed into mining of some kind, and energy negative uses have so far been accommodated through various kinds of theft of either the energy itself(in industrialized mining) or the compute time(in malware). In this light, the tendency towards specialized compute is not shown to be universal, but part of a set of interlocking arms races - securing systems and energy resources better, finding proofs of work with broader applicability across different kinds of hardware, and creating demand for hardware that is more efficient at those proofs that exist. Cryptocurrency in application is likely to be a one-note phenomenon in the same way that the internet boom became an ad boom - the same services with a little speculative cherry on top. It has a big inherent application simply by being decentralized and tradeable. It can be worse on other dimensions and still succeed by being really good at that one thing, financializing the world in greater degrees, and pushing the arms race forward.
necessities 5y ago
Human civilization wont use paper money forever nor will people be satisfied with third parties like banks just updating spreadsheets on their behalf forever; there has to be a solution and cryptocurrency is appearing to fill that Power is decentralizing rapidly with the spread of information and the units of account we use for exchange will need to reflect that
- hocuspocus 5y ago
  Most of the money is already digital, some countries are almost done with paper money, crypto-currencies bring nothing new here. Unless you want to get rid of debt and credit creation, we'll need intermediaries. You can already do P2P lending and funding if that's your thing... you'll realize it's risky and a lot more expensive than using banks.
  - necessities 5y ago
    Thanks for your response. I certainly disagree with your conclusion. The main reason for the invention of bitcoin specifically was to avoid the risk of using banks and intermediaries.
  - arbol 5y ago
    In the future I would expect Intermediaries will be smart contracts that lend your crypto on your behalf. Distributed reputational systems take care of the trust aspect. This could cost less than existing traditional lending systems.
RandomLensman 5y ago
I am amazed at the level of exegesis directed at what is effectively a marketing communication. They are "talking their book" and not making unbiased pronouncements on the future...
gimluzosta 5y ago
First, make USD a fiat currency in 1971. Then, print a lot of money during the last 50 years. Now, when non-banking US corporations debt is more than 50% of GDP govt needs a direction where to move in the future to somehow legitimize endless money printing/cheap debt or at least make it look more plausible. More people surveillance/control will not the hurt the government either. One such way may be a "digital dollar", and in that case the government might need new "bankers" and new "credit card" companies. It is wise taking a risk to invest in this technology today. Who knows, maybe tomorrow you will end up an owner of a digital mint.
boringg 5y ago
Does this inherently tie A16z to try and destabilize or cast shade at traditional financial markets for the gains of their own funds? There is an inherent conflict in that they provide returns to their LPs in USD $ while underwriting crypto service companies which partially/wholly rely on the value of crypto to increase over time to increase adoption of services. The other argument is that it isn't a zero sum game and that both can succeed - however I don't buy that in the long run unless crypto et al. remains an alternative to finance companies. Maybe they split market share and A16z is just diversifying its portfolio of exposure.
boringg 5y ago
Also - is this A16z betting on all the surrounding companies of crypto assets? If so - it is not too dissimilar from all the landlords/property holders in San Francisco making money in the gold rush while the miners did not.
spinchange 5y ago
The value proposition for decentralized, hard money assets and related tech is bear not bull case, about the broader world and economy around us.
RichardHeart 5y ago
It's funny how the attitude between a16z and those generally commenting about crypto in the comments here are opposites.
- deleted 5y ago
  [deleted]

56 points by TimJRobinson 5y ago

Move the hands on the crypto doomsday clock a bit closer to midnight I suppose. Douglas Adams tried to warn us: "[to] revalue the leaf, we are about to embark on a massive defoliation campaign, and ...er, burn down all the forests." https://benoitessiambre.com/specter.html https://benoitessiambre.com/specter.html

TimJRobinson 5y ago
Crypto has evolved far beyond buying and holding digital gold. Decentralized Finance is here and it's about replacing the slow, opaque existing financial system with open, transparent, internet-native protocols. Not to mention DAO's, NFT's etc. This is what a16z is so excited about.
- beefield 5y ago
  Could you point me to a defi project that lets me borrow some crypto even if I have none in the first place?
  - cinquemb 5y ago
    if you are a (lending) business in an emerging market (and make near $500k in loans now), you can reach out to https://goldfinch.finance/ https://goldfinch.finance/ if you are run crypto trading company you can reach out to https://truefi.io/ https://truefi.io/ and https://www.maple.finance/ https://www.maple.finance/ https://www.l2p.finance/ https://www.l2p.finance/ is seeking to aggregate all the uncollateralized lending platforms in defi now.
- MatekCopatek 5y ago
  Has it, really, though? What percentage of worldwide crypto traffic represents paying for goods and services (or doing some kind of meaningful product interaction for non-financial applications) and how much of it is just trading?
  - bouncycastle 5y ago
    This is kind of like being on the internet in 1996 and asking what percentage of the internet is used for e-commerce and how much of it is just hobbyists making their "under construction" Geocities websites. We are still in very early stages. What most likely will happen is that crypto will start to become the "backend" of the financial systems and the regular people will be using it without even knowing it, similar to the way they use Linux powered phones now. Crypto has applications beyond finance too, some things that may end up being disrupted are art and DNS (for example)
    - imtringued 5y ago
      Or someone wakes up and fixes the current fiat system. People thought of solutions 80 years ago.
      - bouncycastle 5y ago
        We can't even know the exact total amount of USD in circulation and we cannot verify ourselves how much is being printed unless we trust the few people in power. I think if we fixed that, we would already be making great strides! On the blockchain, these trivial questions are resolved with a simple database query.
    - hocuspocus 5y ago
      > We are still in very early stages. Bitcoin is 12 years old. Comparing cryptocurrencies to the early days of internet and the web is beyond ridiculous. There's still zero evidence of what will most likely happen, except for more of what we've seen so far: speculation, extortion, money laundering.
      - bouncycastle 5y ago
        Did I say bitcoin? Forget about bitcoin! It's going to be a tiny part of crypto in the future. Bitcoin is 12 years old, but that's the reason why things haven't progressed as much in the last decade. We're slowly getting over speculation & wild-west phaze and moving to the next phase, and discovering many new uses along the way, which I've listed in my parent post. Why I say it's still early? Currently most of the projects are infrastructure and protocol development - kind of like when the internet was still developing. We're still on something like HTTP 1.0 and HTML 2.0 when it comes to crypto. The internet wasn't built in a single decade. It took multiple decades to get to where it is now, this is exactly the same thing playing out now. The amount of building and development is only intensifying. I'd urge you to take a look at what a16a has been investing in https://a16z.com/crypto/ https://a16z.com/crypto/
- BenoitEssiambre 5y ago
  I kinda like NFT's actually, they're not dangerous to the economy like crypto tokens used as currencies. They're more like digitally autographed pieces, a nice way to reward artists. They do seem to sometimes be weirdly overpriced for autographs though. De-Fi is dangerous nonsense.
- jcpham2 5y ago
  -----BEGIN PGP SIGNED MESSAGE----- Hash: SHA256 Hi Tim, I'm a nobody who has been "investing" in and around the crypto ecosystem officially since the date on this gpg sig. Just saying thanks. Long before these markets existed and trust was difficult to define, reputation on internet relay chat was where this ecosystem was birthed. -----BEGIN PGP SIGNATURE----- iQGzBAEBCAAdFiEE9ymb1zh56GZhPqskxx+17WrOBK8FAmDUkPIACgkQxx+17WrO BK/TnwwAqKtRJFrIH5Fo/WgyYFuqG2Kkr4mhrrUbGePIpKm8BawYUeW10TOXVWhB FMPMzMMYFVG2+ZrNR2/CZlJIBFCIq/O+WWnViehxzU1JvwBz4j0zftgd7lMhk8d1 4ZElAhF2825SYJgC4KHfgWqGZ2DsvW5BbX5wnEQJBcNoIjzNv6CvUyoGiVWetNE1 HYY+rJ+H+MnC12dLLXNWcO34KTlOwCOav5Fd6TWdG8SXzxACvOn+osmD33QgzsJm z30C1sjQWWOgORwtrya9e+Ava11ZRnC0p9ajJTQDMLoPtqOof09ORCc+7srjaXb+ Y5VI8fsAD2TsinHVuqCvcfz16vZ3oO2FOWG6XVmMfb4TN80S8QACqIfifokxUy9C 8G8Rnjyu4bLMW4cynqpAnX4hZprh3myJpXKwt5WD2AbZPUXUbSMV9LT5jzftyp9U ng25A+3KToYPx5RbVtdQ/SNGq3XJaiUWC9vzWHBGWy4FH4mV6DP44FJfbtDP4nJL 5ZZM7Pay =q2p1 -----END PGP SIGNATURE-----
bouncycastle 5y ago
The article you linked has a poor understanding of what cryptocurrencies are. First, understand that cryptocurrencies are not just money or currencies. Crypto-assets are programmable and allow many different applications, it's not just limited to purchasing transactions. Realize that there may be many different types of crypto-assets. Some will allow voting & governance, some will have price-stabilizing incentives built in, some will be inflating and mimc fiat, while others will be programmed to mimic gold, some will be interest bearing, some will be non-fungible, some will be a mixture of various properties and incentives. The term "cryptocurrencies" is really misleading.
prestigious 5y ago
I don’t understand the analogy you are trying to make.
- SkyMarshal 5y ago
  Yeah, the “defoliation” analogy seems the opposite to what is actually happening. The creation of many cryptocurrencies is akin to money supply inflation, not deflation.
  - BenoitEssiambre 5y ago
    Well as long as the ecosystem is constantly creating new tokens in proportion to the growing economy sure, things should be fine. A deflationary coin becoming mainstream and dominant is what should raise red flags. I don't see a lot of crypto people working to prevent it from happening.
topaz0 5y ago
Note that the main insight of this blog post, that recessions are caused by a society-wide preference for hoarding money rather than goods, is an insight that dates back to Karl Marx in the early 19th c. Earlier economic theorists had thought that recessions characterized by a general lack of demand were impossible in capitalism because every exchange supposedly involves items of equal value, but that fails to account for the asymmetric demand for money, due to its liquidity (and therefore relative lack of demand for goods/services).
- BenoitEssiambre 5y ago
  yeah, it's liquidity and network effects from people using it as an intermediate asset in every other transactions (instead of bartering directly). I didn't know Marx saw it that way. My inspiration comes from market monetarists of the Milton Friedman tradition.
  - topaz0 5y ago
    There's a lot of good stuff in Marx, whatever people say (and downvote). Whether or not you agree with the solutions he proposes.

dannyw 5y ago

Starting to invest in crypto projects and companies during the onset of a bear market (below 200D MA, after death cross) is a smart move. This seems like a good time to embark on crypto projects, even if we have an upcoming winter. The coolest thing would be if a16z crypto believed in open access as well, and allowed all accredited investors (due to legislation, unfortunately) to contribute a modest amount.

cinquemb 5y ago
They could to some degree if they also publicly disclosed investments in decentralized incubators/funds (if they made them).

glutamate 5y ago

Of course A16Z is enthusiastic about the creation of a financial system not subject to democratic oversight.

sneak 5y ago
…and entirely opt-in.
timdaub 5y ago
To me that's a surprising premise and an even bigger surprise in the conclusion. What makes you think A16Z wants to create a financial system without democratic oversight?
prestigious 5y ago
I know I am!
SkyMarshal 5y ago
Our current financial system has, at best, only a veneer of democratic oversight, evidenced by decades of deregulation and the inability of the government to sensibly reregulate it after the GFC. The banking system pretty much owns politicians cradle-to-grave - you need massive political donations to get elected, then lobbyists have super-access to politicians while in office, then politicians are offered lucrative revolving door jobs and board seats on leaving office.
- glutamate 5y ago
  Agree. crypto will not fix any of that.
sergefaguet 5y ago
A lot of people are excited about that. For good reason too. The very idea that two people exchanging private value should be subject to “democratic oversight” is a totalitarian nightmare.

schaefer 5y ago

If we can talk semantics for just one second, it feels like its been ages since the word "blockchain" was coopted from being a technical term into a hype inducing buzzword. So, it's nice to see someone gently set down the word and use another phrase. In this case "crypto network".

seibelj 5y ago

Crypto is an area of startups that HN collectively is wholly ignorant of because of a rabid and devoted group that despises anything related to blockchain and crypto. It has driven crypto enthusiasts away from commenting, allowing the downvote brigade to take over. There are deep-pocketed investors, talented developers, and very intelligent people in this space (but you won't find them commenting here).

3pt14159 5y ago
Because we do not see the value. I was into crypto really early and I was slowly more and more disgusted what it supported in society. Constant exit scams, criminals using it evade the law, etc. And on the other side, you had to be so freaking careful to actually use the thing yourself without losing all your money. Hardware wallets, backup passwords, whatever. It's not cool to worry about whether or not you still have your hundreds of thousands of dollars or not. It's not fun trying to figure out if you can trust Coinbase or if they're the next MtGox. And besides, if you're trusting one of these players anyway then what is the point? Wasn't this supposed to be about privacy and getting away from centralized banking in the first place? I just don't see any upside. I made my 200x return or whatever it was and I'm out. If I start to see actual products solving real problems that honest citizens in non-sanctioned countries have, I'll revaluate my position.
- bouncycastle 5y ago
  "non-sanctioned countries"? The majority of citizens living in sanctioned countries are honest and have their country sanctioned against their will, but cannot say anything against their government. Why should they get punished for something that's due to their plight? They deserve freedom like all human beings. Anyway, I think the real danger is if our societies move to 100% cashless. Crypto provides a good counterbalance where we get to retain the benefits of cash while going electronic - if you're looking for any benefit, I think this is it.
  - 3pt14159 5y ago
    They do deserve freedom in a broader sense, yes, but the world is unfortunate and sanctions are how we discourage war. Most of the time sanctions are targeted to individuals or corporations, but there are cases where it is country-wide.

endisneigh 5y ago

> We believe that the next wave of computing innovation will be driven by crypto. We are radically optimistic about crypto’s potential to restore trust and enable new kinds of governance where communities collectively make important decisions about how networks evolve, what behaviors are permitted, and how economic benefits are distributed. That’s why today we’re pleased to announce a new $2.2 billion fund to continue investing in crypto networks and the founders and teams building in this space. This represents the beginning of an exciting new chapter for the a16z crypto team. Can somehow explain to me exactly how crypto will do this without intermediaries? If there must be intermediaries then why do you need crypto? - How can crypto "restore trust"? - How can it enable "new kinds of governance" - unless "new" means Plutocracy? - How can any economic benefits be distributed when by definition cryptocurrency holders are accountable to no one (something like a redistribution of funds would eventually require either an intermediary in which all holders are beholden to, or voting, however in either case that's the exact scenario you're in if you hold fiat in a democratic country so I'm not really getting it).

epistasis 5y ago
> How can crypto "restore trust"? For people with very poor understandings of economics, and have drunk deep from the sacred texts of Zerohedge, that have been standing on a wooden box on the street corner for the past decade preaching about the evils of the coming wave of inflation, as the Fed struggles mightily to be able to even get inflation up to the 2% target, much less above it for any period of time, crypto is the savior to get us away from fiat money.
- JohnJamesRambo 5y ago
  Maybe I just shouldn’t read Hacker News anymore.
  - 71a54xd 5y ago
    We should all ask ourself this question more often ;)
  - 5y ago

mis1988 5y ago

A16Z: "It's time to build" Also A16Z: "We're raising (another) crypto fund"

qayxc 5y ago

I don't quite understand. So they say: > We believe that the next wave of computing innovation will be driven by crypto. But then they also say that [0]: > Crypto is purely a software movement and doesn’t depend on a hardware buildout, in contrast to, say, the internet, which required laying cables and building cell towers That doesn't make any sense, though. Crypto heavily depends on specialised hardware (ASICs, GPUs, SSDs, ...) and existing network infrastructure (have fun trying to establish crypto in underdeveloped countries). I get that products are just based on software and that infrastructure is provided by 3rd parties, but so far very little has come out of crypto in terms of "innovation in computing". Just a random pick of their investments, ARwave [1], reveals actual regression, not innovation: > The maintainers of the network are able to filter and screen the transaction in whichever manner they choose, checking against known illicit material, scanning the data with computer vision software, et cetera. So basically "store data forever, decentralized, no more 404s, no stealth edits, blah", but also "we decide what's actually going to be stored and reserve the right to censor your data however we see fit". Honestly, I don't see the innovation in that. Most of the other investments are either NFT market places or crypto-based trading platforms. Again, not really an innovation in computing. Maybe I'm just too illiterate when it comes to decoding marketing speak. [0] https://a16z.com/crypto/#vertical-landing-investment-thesis https://a16z.com/crypto/#vertical-landing-investment-thesis [1] https://www.arweave.org/technology#papers https://www.arweave.org/technology#papers [2] https://www.diem.com/en-us/ https://www.diem.com/en-us/

testific8 5y ago
I agree with most of what you've said, but some cryptocurrencies use proof-of-work systems (like RandomX) that truly are ASIC/FPGA/GPU-proof by design.
megameter 5y ago
The 90's dot com gold rush is the rhyme to the crypto gold rush. Lots of talk about ecommerce, revolutionary tech, etc. The 2000's saw the sobered outcomes: ads, ads, ads. All the apps were just conduits to adtech - very wide marketing funnels. Nearly all the actual services had been demonstrated before in a non-monetized, pre-Web context. A16Z is correct in saying that the dot com boom had a major build-out aspect. It needed broadband deployment and intensive consumer marketing. Cryptocurrency has so far demonstrated itself to be more like a bottom-feeder on hardware resources; hardware not being used for something obviously more valuable gets repurposed into mining of some kind, and energy negative uses have so far been accommodated through various kinds of theft of either the energy itself(in industrialized mining) or the compute time(in malware). In this light, the tendency towards specialized compute is not shown to be universal, but part of a set of interlocking arms races - securing systems and energy resources better, finding proofs of work with broader applicability across different kinds of hardware, and creating demand for hardware that is more efficient at those proofs that exist. Cryptocurrency in application is likely to be a one-note phenomenon in the same way that the internet boom became an ad boom - the same services with a little speculative cherry on top. It has a big inherent application simply by being decentralized and tradeable. It can be worse on other dimensions and still succeed by being really good at that one thing, financializing the world in greater degrees, and pushing the arms race forward.

necessities 5y ago

Human civilization wont use paper money forever nor will people be satisfied with third parties like banks just updating spreadsheets on their behalf forever; there has to be a solution and cryptocurrency is appearing to fill that Power is decentralizing rapidly with the spread of information and the units of account we use for exchange will need to reflect that

hocuspocus 5y ago
Most of the money is already digital, some countries are almost done with paper money, crypto-currencies bring nothing new here. Unless you want to get rid of debt and credit creation, we'll need intermediaries. You can already do P2P lending and funding if that's your thing... you'll realize it's risky and a lot more expensive than using banks.
- necessities 5y ago
  Thanks for your response. I certainly disagree with your conclusion. The main reason for the invention of bitcoin specifically was to avoid the risk of using banks and intermediaries.
- arbol 5y ago
  In the future I would expect Intermediaries will be smart contracts that lend your crypto on your behalf. Distributed reputational systems take care of the trust aspect. This could cost less than existing traditional lending systems.

RandomLensman 5y ago

I am amazed at the level of exegesis directed at what is effectively a marketing communication. They are "talking their book" and not making unbiased pronouncements on the future...

gimluzosta 5y ago

First, make USD a fiat currency in 1971. Then, print a lot of money during the last 50 years. Now, when non-banking US corporations debt is more than 50% of GDP govt needs a direction where to move in the future to somehow legitimize endless money printing/cheap debt or at least make it look more plausible. More people surveillance/control will not the hurt the government either. One such way may be a "digital dollar", and in that case the government might need new "bankers" and new "credit card" companies. It is wise taking a risk to invest in this technology today. Who knows, maybe tomorrow you will end up an owner of a digital mint.

boringg 5y ago

Does this inherently tie A16z to try and destabilize or cast shade at traditional financial markets for the gains of their own funds? There is an inherent conflict in that they provide returns to their LPs in USD $ while underwriting crypto service companies which partially/wholly rely on the value of crypto to increase over time to increase adoption of services. The other argument is that it isn't a zero sum game and that both can succeed - however I don't buy that in the long run unless crypto et al. remains an alternative to finance companies. Maybe they split market share and A16z is just diversifying its portfolio of exposure.

boringg 5y ago

Also - is this A16z betting on all the surrounding companies of crypto assets? If so - it is not too dissimilar from all the landlords/property holders in San Francisco making money in the gold rush while the miners did not.

spinchange 5y ago

The value proposition for decentralized, hard money assets and related tech is bear not bull case, about the broader world and economy around us.

RichardHeart 5y ago

It's funny how the attitude between a16z and those generally commenting about crypto in the comments here are opposites.

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