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I think the VCs are stuck between a rock and a hard place. It makes sense to invest in "web3" because of the potential power law returns if someone figures out

by pg_bot 5y ago

I think the VCs are stuck between a rock and a hard place. It makes sense to invest in "web3" because of the potential power law returns if someone figures out how to make something useful. However, I think we've had enough time to evaluate enough of these technologies to claim that the emperor has no clothes. It may take a few years but I think every single web3 investment will have to be written off as a complete loss. There is just no problem being solved there that couldn't be solved more efficiently elsewhere.

capableweb 5y ago
> However, I think we've had enough time to evaluate enough of these technologies "We" (humanity) started working on networking/the foundations of the internet in the 1970s, and it wasn't until late 1990s that it actually became mainstream and started providing a solution to "real" problems we had at that time. What makes you confident we can judge cryptocurrencies in just ~12 years instead of ~20 years it took for the internet to take hold? > There is just no problem being solved there that couldn't be solved more efficiently elsewhere. How about a network where anyone with a computer could transfer X amount of something to someone else, without having to rely on a single 3rd party? You'll say that it's not a problem in practice, but the same thing was said about email in the past.
- pg_bot 5y ago
  Even in the early days of computing, there were obvious benefits to networking computers. The work wasn't done for no reason, there was clear value in coming up with all of these protocols. The main reason it took so long for general adoption was the fact that computers were not in most family homes until the 1990s. The barrier to adopting the internet wasn't the inherent value of the protocols it was the cost of the machine to the average consumer. I'm confident in saying this because we are further along in the computing adoption cycle and we haven't really come up with anything useful. Your point about transferring something to someone else without a third party ignores transaction costs. Who cares if you need a third party if you are purchasing something legally and the cost to transact is low?
  - saurik 5y ago
    I mean, if I want to send you some money, and let's say you are just in Canada (I am in the United States), my options are limited and many are super expensive... and almost all of them take forever. The only cheap, easy, and fast way is PayPal (or their subsidiary Venmo), which I don't think anyone truly likes (evidence for which is easy: find literally any thread on Hacker News about them that isn't using their existence to defend why cryptocurrencies are unnecessary). Other than PayPal, Bitcoin (or Ethereum and Avalanche or what have you) is much easier than all of these systems, and while it currently may or may not be as cheap, it was frankly a "first draft": the subsequent protocols the community is using are all (incrementally) cheaper and the ecosystem has even been succeeding at improving the overall scalability. If you tell me your Bitcoin address--no matter where you are in this increasingly global world--I can reliably send you money.
    - pg_bot 5y ago
      The best case scenario I can see is that cryptocurrencies push the US banking system to adopt something like the British "Faster Payment Services". If anyone begins to gain adoption they will be outcompeted by incumbent banks. It has never been the case that banking has been limited by technology for quicker and cheaper transactions in the US.
      - deleted 5y ago
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    - deleted 5y ago
      [deleted]
- uncomputation 5y ago
  The value prop here is the “without a third party” bit I presume? That seems more like a political or ethical preference rather than true value. Email allowed you to instantly and perfectly send a message anywhere at any time, and you could cut down on machine and paper/ink costs. Genuine value. Ironically, the crypto way of doing transactions is more like the fax machine to Venmo’s email. The former is slow and more expensive, while the latter is instant and free. Edit: I’d also like to point out you still have a third party in crypto. It’s just that the third party is the entire network rather than a single company.
  - capableweb 5y ago
    If you compare email to snailmail, the same argument could be made. That it's over the internet is just a preference, why care about email when normal mail works perfectly fine? "Without a single 3rd party" is a technical feature, one that allows people to transfer money anywhere, for any reason via any device connected to the internet, without having to open up a bank account. According to the last numbers I've read, the number of "unbanked" people is above 1 billion in the world, some in my family is included there. For them, cryptocurrencies gives them the opportunity of sending/receiving currency cross-border much easier than what Venmo/Paypal/Transferwise/WesternUnion ever been able to provide (and trust me, we've tried most platforms). The Bitcoin way of doing transactions is indeed slow and expensive, but there are many alternatives out there, if you care to look for them. > Edit: I’d also like to point out you still have a third party in crypto. It’s just that the third party is the entire network rather than a single company. Yup, that's why my comment includes "single 3rd party", not just "any 3rd party". Everyone who understands blockchain understands that there are 3rd parties involved, not everyone seems to understand the difference between multiple and single 3rd parties though.
    - pg_bot 5y ago
      "If you compare email to snailmail, the same argument could be made. That it's over the internet is just a preference, why care about email when normal mail works perfectly fine?" This is nonsense. Email is orders of magnitude cheaper and faster than snail mail. Talk to any business owner who made the switch from physically mailing bills to emailing their clients invoices and ask them how much time and money they saved. The value proposition for email is obvious.
- tome 5y ago
  Computer networking already had value in the 1970s (and before)!

by pg_bot 5y ago

capableweb 5y ago

> However, I think we've had enough time to evaluate enough of these technologies "We" (humanity) started working on networking/the foundations of the internet in the 1970s, and it wasn't until late 1990s that it actually became mainstream and started providing a solution to "real" problems we had at that time. What makes you confident we can judge cryptocurrencies in just ~12 years instead of ~20 years it took for the internet to take hold? > There is just no problem being solved there that couldn't be solved more efficiently elsewhere. How about a network where anyone with a computer could transfer X amount of something to someone else, without having to rely on a single 3rd party? You'll say that it's not a problem in practice, but the same thing was said about email in the past.

pg_bot 5y ago
Even in the early days of computing, there were obvious benefits to networking computers. The work wasn't done for no reason, there was clear value in coming up with all of these protocols. The main reason it took so long for general adoption was the fact that computers were not in most family homes until the 1990s. The barrier to adopting the internet wasn't the inherent value of the protocols it was the cost of the machine to the average consumer. I'm confident in saying this because we are further along in the computing adoption cycle and we haven't really come up with anything useful. Your point about transferring something to someone else without a third party ignores transaction costs. Who cares if you need a third party if you are purchasing something legally and the cost to transact is low?
- saurik 5y ago
  I mean, if I want to send you some money, and let's say you are just in Canada (I am in the United States), my options are limited and many are super expensive... and almost all of them take forever. The only cheap, easy, and fast way is PayPal (or their subsidiary Venmo), which I don't think anyone truly likes (evidence for which is easy: find literally any thread on Hacker News about them that isn't using their existence to defend why cryptocurrencies are unnecessary). Other than PayPal, Bitcoin (or Ethereum and Avalanche or what have you) is much easier than all of these systems, and while it currently may or may not be as cheap, it was frankly a "first draft": the subsequent protocols the community is using are all (incrementally) cheaper and the ecosystem has even been succeeding at improving the overall scalability. If you tell me your Bitcoin address--no matter where you are in this increasingly global world--I can reliably send you money.
  - pg_bot 5y ago
    The best case scenario I can see is that cryptocurrencies push the US banking system to adopt something like the British "Faster Payment Services". If anyone begins to gain adoption they will be outcompeted by incumbent banks. It has never been the case that banking has been limited by technology for quicker and cheaper transactions in the US.
    - deleted 5y ago
      [deleted]
  - deleted 5y ago
    [deleted]
uncomputation 5y ago
The value prop here is the “without a third party” bit I presume? That seems more like a political or ethical preference rather than true value. Email allowed you to instantly and perfectly send a message anywhere at any time, and you could cut down on machine and paper/ink costs. Genuine value. Ironically, the crypto way of doing transactions is more like the fax machine to Venmo’s email. The former is slow and more expensive, while the latter is instant and free. Edit: I’d also like to point out you still have a third party in crypto. It’s just that the third party is the entire network rather than a single company.
- capableweb 5y ago
  If you compare email to snailmail, the same argument could be made. That it's over the internet is just a preference, why care about email when normal mail works perfectly fine? "Without a single 3rd party" is a technical feature, one that allows people to transfer money anywhere, for any reason via any device connected to the internet, without having to open up a bank account. According to the last numbers I've read, the number of "unbanked" people is above 1 billion in the world, some in my family is included there. For them, cryptocurrencies gives them the opportunity of sending/receiving currency cross-border much easier than what Venmo/Paypal/Transferwise/WesternUnion ever been able to provide (and trust me, we've tried most platforms). The Bitcoin way of doing transactions is indeed slow and expensive, but there are many alternatives out there, if you care to look for them. > Edit: I’d also like to point out you still have a third party in crypto. It’s just that the third party is the entire network rather than a single company. Yup, that's why my comment includes "single 3rd party", not just "any 3rd party". Everyone who understands blockchain understands that there are 3rd parties involved, not everyone seems to understand the difference between multiple and single 3rd parties though.
  - pg_bot 5y ago
    "If you compare email to snailmail, the same argument could be made. That it's over the internet is just a preference, why care about email when normal mail works perfectly fine?" This is nonsense. Email is orders of magnitude cheaper and faster than snail mail. Talk to any business owner who made the switch from physically mailing bills to emailing their clients invoices and ask them how much time and money they saved. The value proposition for email is obvious.
tome 5y ago
Computer networking already had value in the 1970s (and before)!