6 ms·

I imagine all these rich, successful people investing in this stuff must know something you don't

pavlov 4y ago
People like Sequoia and the Ontario Teachers' Pension Plan who invested tens of millions into FTX last year, and whose investment is most likely worthless now? Smart people make bad investments too, often out of FOMO.
- djtango 4y ago
  The FOMO can get institutionalised. When you are incentivised to chase funding (as a GP) if you aren't doing the cypto thing, your LPs will go with another fund and/or you'll get redeemed. And if you have to go in on crypto, FTX was supposed to be a sure bet
dvt 4y ago
This might be satire, but in case it isn't: there are plenty of very rich people that are very dumb. And plenty of brilliant people that are destitute. This disparity is even moreso skewed in industries like finance, which tends to favor luck way more than, e.g., in startup land where you need things like customers and product market fit, so "faking it until you make it" is much harder. Most of the "investment" that companies like OpenSea/FTX/etc. have been getting is pure gambling by the likes of a16z and other institutional investors. There's no traditional "exit" to pursue here, and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. There's no technology, no value, hardly any users, and if you're not sure who the sucker is, it's probably you.
- senttoschool 4y ago
  and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. A lot of people didn't see this. VCs used their reputation to pump a token. Then they dump the token almost immediately on retail. This was a much faster way to make money than waiting years for a traditional startup to exit. VCs were in on the scams. This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator.
  - dvt 4y ago
    > This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator. Even though I understand this from an ethical standpoint, this is the entire job of venture capital: make a ton of money as fast as possible while minimizing risk. Crypto is literally the perfect vehicle for this. They can't do this in traditional markets because actual hedge funds like Jane Street and Two Sigma will absolutely demolish them. So I think that a16z, Sequoia, etc. have been brilliantly making their clients a lot of money. If we had money in their fund, we'd both probably be very happy campers. I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet.
    - senttoschool 4y ago
      I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet. I'm not blaming them. I just lost respect for them.
    - prepend 4y ago
      > make a ton of money as fast as possible while minimizing risk. I like to think that the right way to do this is by creating lots of lasting value. Many VC wins make them money and create value for the company, employees, users, world. It’s not exclusive that they must create fake bullshit to make money. Funding Apple makes money and results in hardware, software, and innovation. Pumping lottery and Ponzi schemes just exploits value from poor suckers.
      - dvt 4y ago
        I mean plenty of VCs invested in JUUL which literally gives people cancer; that's probably worse than stealing money from people.
    - pierrebai 4y ago
      You're saying this as if VC were some natural phenomenon and not people. VC are people, VC i one of those things that are mostly only people. Those people choose to use financial vehicules and strategies that are not ethical.
senttoschool 4y ago
Crypto is a transfer of wealth from the poor to the rich. This is because the poor is hoping to get rich quick. But the rich has all the inside information in an unregulated environment as well as the ability to pump and dump. Occasionally, someone poor makes money and tells his friends about his new lambo - hoping to get others into the scam/ponzi.
- ETH_start 4y ago
  Regulations, i.e. centralized control via the SEC, doesn't help the poor. All of the massive returns since the SEC's entry into the crypto market in 2017 have been reserved for venture capital funds. Before 2017, ordinary people were able to participate in Ethereum's token crowdsale and subsequently get returns of 1000X. Narratives like yours are peddled to the poor to manufacture consent for anti-capitalist "consumer protection" laws that deprive them of investment options, so that insiders gain a competitive advantage over them.
  - senttoschool 4y ago
    99% of projects that had ICOs before 2017 are dead. All investors were wiped out. Founders who raised money were free to use the money however they want, including for personal purchases, insider trading, etc. Guess who got wiped out the most? The uninformed poor people.
    - ETH_start 4y ago
      The market capitalization of projects that did token sales before 2017 is orders of magnitude greater than the amount invested in token sales before 2017, meaning investors in pre-2017 token sales are, in the aggregate, massively up. This is what venture capital investing is: you invest in 100 projects to hit one homerun. Here is a good paper showing that token sale investments were primarily small, and opening up the venture capital market to the broader public: https://link.springer.com/article/10.1007/s11408-020-00366-0 https://link.springer.com/article/10.1007/s11408-020-00366-0 You need to insist otherwise because thousands of regulator jobs, and dozens of venture capital funds, depend on it. The poor are just the propaganda fodder the insiders cynically use to gain a political mandate for their repression of the poor.
prepend 4y ago
Obviously. If Matt Damon and Kim Kardashian think it’s a good idea and promote it, it must be good, right?

People like Sequoia and the Ontario Teachers' Pension Plan who invested tens of millions into FTX last year, and whose investment is most likely worthless now? Smart people make bad investments too, often out of FOMO.

djtango 4y ago
The FOMO can get institutionalised. When you are incentivised to chase funding (as a GP) if you aren't doing the cypto thing, your LPs will go with another fund and/or you'll get redeemed. And if you have to go in on crypto, FTX was supposed to be a sure bet

dvt 4y ago

This might be satire, but in case it isn't: there are plenty of very rich people that are very dumb. And plenty of brilliant people that are destitute. This disparity is even moreso skewed in industries like finance, which tends to favor luck way more than, e.g., in startup land where you need things like customers and product market fit, so "faking it until you make it" is much harder. Most of the "investment" that companies like OpenSea/FTX/etc. have been getting is pure gambling by the likes of a16z and other institutional investors. There's no traditional "exit" to pursue here, and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. There's no technology, no value, hardly any users, and if you're not sure who the sucker is, it's probably you.

senttoschool 4y ago
and the whole strategy is essentially a pump and dump (often involving arcane tokenomics) where VCs dump on retail and make 10-100x returns. A lot of people didn't see this. VCs used their reputation to pump a token. Then they dump the token almost immediately on retail. This was a much faster way to make money than waiting years for a traditional startup to exit. VCs were in on the scams. This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator.
- dvt 4y ago
  > This is why I lost complete respect for a16z and hate that crypto-shill Garry Tan will run Y Combinator. Even though I understand this from an ethical standpoint, this is the entire job of venture capital: make a ton of money as fast as possible while minimizing risk. Crypto is literally the perfect vehicle for this. They can't do this in traditional markets because actual hedge funds like Jane Street and Two Sigma will absolutely demolish them. So I think that a16z, Sequoia, etc. have been brilliantly making their clients a lot of money. If we had money in their fund, we'd both probably be very happy campers. I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet.
  - senttoschool 4y ago
    I blame governments for being slow regulating crypto and I blame individuals for being greedy. Imo, blaming VCs for making money is like blaming water it's wet. I'm not blaming them. I just lost respect for them.
  - prepend 4y ago
    > make a ton of money as fast as possible while minimizing risk. I like to think that the right way to do this is by creating lots of lasting value. Many VC wins make them money and create value for the company, employees, users, world. It’s not exclusive that they must create fake bullshit to make money. Funding Apple makes money and results in hardware, software, and innovation. Pumping lottery and Ponzi schemes just exploits value from poor suckers.
    - dvt 4y ago
      I mean plenty of VCs invested in JUUL which literally gives people cancer; that's probably worse than stealing money from people.
  - pierrebai 4y ago
    You're saying this as if VC were some natural phenomenon and not people. VC are people, VC i one of those things that are mostly only people. Those people choose to use financial vehicules and strategies that are not ethical.

senttoschool 4y ago

Crypto is a transfer of wealth from the poor to the rich. This is because the poor is hoping to get rich quick. But the rich has all the inside information in an unregulated environment as well as the ability to pump and dump. Occasionally, someone poor makes money and tells his friends about his new lambo - hoping to get others into the scam/ponzi.

ETH_start 4y ago
Regulations, i.e. centralized control via the SEC, doesn't help the poor. All of the massive returns since the SEC's entry into the crypto market in 2017 have been reserved for venture capital funds. Before 2017, ordinary people were able to participate in Ethereum's token crowdsale and subsequently get returns of 1000X. Narratives like yours are peddled to the poor to manufacture consent for anti-capitalist "consumer protection" laws that deprive them of investment options, so that insiders gain a competitive advantage over them.
- senttoschool 4y ago
  99% of projects that had ICOs before 2017 are dead. All investors were wiped out. Founders who raised money were free to use the money however they want, including for personal purchases, insider trading, etc. Guess who got wiped out the most? The uninformed poor people.
  - ETH_start 4y ago
    The market capitalization of projects that did token sales before 2017 is orders of magnitude greater than the amount invested in token sales before 2017, meaning investors in pre-2017 token sales are, in the aggregate, massively up. This is what venture capital investing is: you invest in 100 projects to hit one homerun. Here is a good paper showing that token sale investments were primarily small, and opening up the venture capital market to the broader public: https://link.springer.com/article/10.1007/s11408-020-00366-0 https://link.springer.com/article/10.1007/s11408-020-00366-0 You need to insist otherwise because thousands of regulator jobs, and dozens of venture capital funds, depend on it. The poor are just the propaganda fodder the insiders cynically use to gain a political mandate for their repression of the poor.

prepend 4y ago

Obviously. If Matt Damon and Kim Kardashian think it’s a good idea and promote it, it must be good, right?