A16Z is re-registering as a financial advisor, renouncing its status as a VC • Hacker News Board

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

#271

Post by travisjungroth » Wed, Apr 03, 2019, 4:42 PM UTC

eouw0o83hf wrote: post #219

travisjungroth wrote: post #70

Earlier quoted context omitted.

I've heard this argument, and I don't see how it works. It relies on trusting the information put onto a blockchain.

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…

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.

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

#272

Post by beaner » Wed, Apr 03, 2019, 4:44 PM UTC

kurtisc wrote: post #190

beaner wrote: post #104

Earlier quoted context omitted.

Companies don't own the blockchain. Not sure if you're familiar with crypto by this comment, but inflation control was the key feature that enabled Bitcoin (and the rest) to exist. The whitepaper is worth a read: https://bitcoin.org/bitcoin.pdf

A single entity at one point had over 50% of the mining power for Bitcoin, effectively owning its blockchain.

This isn't really true. The only thing you can do with 50% of the hashpower is determine the most recent block. And it still has to be a legitimate block. You can't undo history very far. And to the extent that you can, transactions either go through as intended or get reversed, and the owners keep their money. Money doesn't get redirected.

Any blockchain going through repeated attack would be pointless to use anyway, so anyone with such hashpower has an incentive to cooperate in the long-term. It's also not possible to stop others from contributing hashpower, so you don't really own it in a meaningful sense.

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

#273

Post by arcticbull » Wed, Apr 03, 2019, 4:50 PM UTC

stale2002 wrote: post #176

chx wrote: post #158

Earlier quoted context omitted.

> and has use cases that beat regular cash, Tell me.

Censorship resistant electronic, financial transactions. The evidence shows that it is much easier to censor a credit card payment, or bank transaction, than it is to censor a crypto transaction.

Which only matters if you're trying to do illegal things on an international scale. Locally, you've always got cash.

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

#274

Post by arcticbull » Wed, Apr 03, 2019, 4:50 PM UTC

icey wrote: post #197

chx wrote: post #158

Earlier quoted context omitted.

> and has use cases that beat regular cash, Tell me.

Sometimes it's nicer to send money than it is to authorize someone to take money from an account, especially if you're unsure of the recipient's ability or desire to protect that account information (credit card number, bank account info, etc). For me, Bitcoin has effectively replaced cashier's checks.

Popmoney, Venmo, Square Cash all allow you to do that without the massive FOREX risk and tax reporting requirements.

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

#275

Post by arcticbull » Wed, Apr 03, 2019, 4:52 PM UTC

soup10 wrote: post #152

dzhiurgis wrote: post #134

Of everyone I follow it seems it’s only a16z still believes in crypto.

they must be holding some pretty big bags lol

I also wouldn't be surprised if they made huge investments during crypto mania that are now worth pennies on the dollar. Being bullish is the only way to get other people to buy them and stem the bleeding.

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

#276

Post by arcticbull » Wed, Apr 03, 2019, 4:59 PM UTC

PhilippGille wrote: post #175

mruts wrote: post #170

Earlier quoted context omitted.

Seeing how slow and expensive both BTC and ETH are, micropayments aren’t really viable, tbh. The mining and gas fees for BTC and ETH respectively are going to be higher than the cut a payment processor would take. The one advantage that you might be alluding to is that bitcoins are divisible into satoshi’s, which are much more granular than cents.

I was specifically talking about the Lightning Network, a second layer that facilitates Bitcoin's smart contract capabilities to enable off-chain payments via so called payment channels. There's no mining involved during transactions in the channel - only for opening and closing a channel, making the transactions almost instant. Thanks to proper routing you can reach most of the peers even with a single channel. It e…

Not enough thought. With 7tx/sec it will take 35 years to open a channel for everyone on earth and another 35 years to close it assuming nobody is born. I believe that's in the white paper, actually. Either way you'll be paying $1.26 to open a channel and another $1.26 to close it, so paying Stripe 2.9% + $0.30 makes the fee break-even point vs having a wallet on your micropayments server funding with $76, any less, Stripe wins.

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

#277

Post by arcticbull » Wed, Apr 03, 2019, 5:01 PM UTC

gruez wrote: post #226

mruts wrote: post #170

Earlier quoted context omitted.

Seeing how slow and expensive both BTC and ETH are, micropayments aren’t really viable, tbh. The mining and gas fees for BTC and ETH respectively are going to be higher than the cut a payment processor would take. The one advantage that you might be alluding to is that bitcoins are divisible into satoshi’s, which are much more granular than cents.

With Bitcoin I recently sent a $30 transaction (non lightning) for around $0.05 in fees. That's 0.1%. It wasn't "low fee" either - it was confirmed within the next block. Bitcoin transactions are charged by the byte, so I could have sent a million dollars for $0.05 as well.

Fees are $1.26 right now, domestic ACHs are largely free. What was your FOREX risk? Did you figure in that you now have to report your transaction on Form 8949, can no longer use TurboTax and will have to spend hours figuring out your reporting obligations or paying an accountant? If you're just going to break the law the rest of the calculus probably doesn't matter as much.

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

#278

Post by arcticbull » Wed, Apr 03, 2019, 5:02 PM UTC

thinkmassive wrote: post #246

phamilton wrote: post #225

Earlier quoted context omitted.

Venmo and the like. Any ledger will work just fine if it's built for fast payments. That ledger doesn't need to be distributed and/or decentralized. Solving trust is an oversold benefit of BTC in my opinion.

Solving trust is the only benefit of Bitcoin, but I think you’re underestimating the importance of financial sovereignty.

Lack thereof is currently working for 7.5 billion people. Bitcoin works for basically nobody.

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

#279

Post by rattray » Wed, Apr 03, 2019, 5:08 PM UTC

ALittleLight wrote: post #247

rattray wrote: post #236

Earlier quoted context omitted.

As a would-be founder, this new move from A16Z makes me worry they won't focus on helping startups like this anymore. Anecdotes like this help quell that fear a bit, even if wrongly.

Why would you want to wrongly quell a fear?

I want to adjust my fear to the real level of risk/uncertainty; in this case, that's still above zero, but the anecdote above helps drop it down.

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

#280

Post by mrnobody_67 » Wed, Apr 03, 2019, 5:10 PM UTC

mattnewport wrote: post #257

pbreit wrote: post #252

Earlier quoted context omitted.

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…

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.

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.