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Coinbase from YC to DPO

blog.ycombinator.com

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Re: Coinbase from YC to DPO

#321

Post by abecedarius »

stormbeta wrote: post #190
gonehome wrote: post #138

Earlier quoted context omitted.

I'm skeptical of proof-of-stake, proof-of-work seems like the main innovation of cryptocurrencies that differentiates them from the standard financial industry? If you swap out POW for POS (or worse clearing house type trust orgs like Stellar) then aren't you just putting trust into some incentive based system no different than existing financial systems? Just instead a government you're trusting some other entity. Y…

And this is exactly why I'm so skeptical of cryptocurrencies in general. There doesn't appear any viable way to make them work as currencies that doesn't either have horrendous externalities, simply replicate what existing currencies already do (often poorly and with many downsides), or often both. I don't think it's a coincidence that even a decade plus later, the primary use cases for crypto still seem to be grey/b…

> way ... that doesn't either have horrendous externalities

The CO2 emission externality need have nothing to do with Bitcoin or any other proof-of-work chain. Tax carbon at whatever level makes sense and Bitcoin will adjust. (As I understand it, even currently Bitcoin mining mainly uses renewable energy, because it's cheaper; and it's trending cheaper still.)

The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.

Re: Coinbase from YC to DPO

#322

Post by cableshaft »

AlchemistCamp wrote: post #156

This is pretty amazing. Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10 It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.

Wow. Assuming he put in just $10,000 (and I imagine it was probably more than that), 6000x return would be 60 million dollars.

Any early companies out there right now seem like it could potentially offer even a 10th of that in ~5-10 years?

Re: Coinbase from YC to DPO

#323

Post by rawtxapp »

jedberg wrote: post #154
TameAntelope wrote: post #120

Is there any way of knowing how much YC made on the IPO? Ballpark/order of magnitude? Always curious to see what a win looks like from the accelerator side.

Not sure about YC, but Andreessen-Horowitz seems to have made about $14B from their $2M investment? Assuming I'm reading this SEC filing correctly. And Union Square Ventures appears to have turned $13M into about $7B? https://www.sec.gov/Archives/edgar/data/1679788/000162828021...

I believe this is the proof why VCs chase those 10x numbers, I bet that that single investment has paid off all their failed investments and then some.

Re: Coinbase from YC to DPO

#324

Post by pinkybanana »

AlchemistCamp wrote: post #156

This is pretty amazing. Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10 It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.

Airbnb market cap is at 105 billion and Coinbase is currently at 86.

Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.

Re: Coinbase from YC to DPO

#325

Post by PretzelPirate »

nojito wrote: post #106
unreal37 wrote: post #50

Earlier quoted context omitted.

That's a disingenuous argument. Just because you won't accept your salary in Euros, doesn't mean you don't have faith in the future of it.

How so? You would think the currency of the future would be liquid enough to provide capital for their growth no? Why resort to raising USD?

Coinbase did a direct listing and didn’t raise money from this event. They provided liquidity for their shareholders.

Re: Coinbase from YC to DPO

#327

Post by pinkybanana »

cableshaft wrote: post #322
AlchemistCamp wrote: post #156

This is pretty amazing. Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10 It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.

Wow. Assuming he put in just $10,000 (and I imagine it was probably more than that), 6000x return would be 60 million dollars. Any early companies out there right now seem like it could potentially offer even a 10th of that in ~5-10 years?

Well I bought BTC at $1 and so did many others, now it trades at $60k...

Re: Coinbase from YC to DPO

#328

Post by ignoramous »

cwkoss wrote: post #260
Ekaros wrote: post #233

Earlier quoted context omitted.

I feel myself as value investor. That is why cryptos or Tesla and many other tech companies never made sense to me... I might be right one day, but currently it seems that market is what market is.

Everything seems so overinflated right now. As a value investor, what looks good currently?

$NET if you're looking for slightly undervalued tech stocks.

The recently announced products to take on zscaler, crowdstrike et al looks commendable whilst they are also at the same time going after the cloud incumbents with Workers. I'd reckon, they've got the engineering chops and the infrastructure to bat both those out of the park.

Re: Coinbase from YC to DPO

#329

Post by reidjs »

onlyrealcuzzo wrote: post #130
dehrmann wrote: post #79

Earlier quoted context omitted.

> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase That was the pitch of crypto. In practice, people are buying it as a bet that it will go up. I suspect most people are only buying it because the value is going up. If bitcoin actually worked like a currency and traded between $8k and $12 for the past 5 years, no one would care.

Global wealth is $400T. All crypto currency combined is worth about ~$2T at this point. So to store 0.5% of the world's wealth, we are using 0.6% of the world's energy. Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together. So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And Doesn't seem like the ideal…

This implies that the energy required to store wealth in centralized databases is easily calculable.

It also implies that the goal of storing wealth is optimizing for low energy usage, which seems less important than security/safety, ease of transfer, taxation, automation, and other factors.

I’m not making an argument for or against PoW. Just want to point out it’s possible >.6% of humans energy output may in fact go towards banking and payments.

Re: Coinbase from YC to DPO

#330

Post by DCKing »

Fede_V wrote: post #35

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be sig…

Having mined cryptocurrency a long long time ago when it was still a novelty, it's really good to appreciate just how bad the externalities are for cryptocurrencies. The incentives are created for people to buy the cheapest energy possible and just burn it up for a made up financial instrument [0], even when that comes with a significant carbon footprint. Even if mining is only a tenth as bad as the University of Cambridge thinks [1]. On a much more minor note, it takes up energy generation (renewable and otherwise) and chip production resources that could be spent on actual production instead of yet another financial instrument.

I'd be in favor of banning the trade of all PoW cryptocurrencies for this reason alone. There is no proper way of banning mining in general, and neither should anyone desire to ban specific types of computation. Banning its trade to strongly disincentivize the sheer senseless resource consumption is more important and much more clear cut than any financial arguments to do it.

I realize this would utterly devastate the current cryptocurrency market, but that's the point (at least for anything that isn't proof of stake). We should get this over with before our dependency on it further increases and the environmental damage gets worse.

The zeitgeist around this has changed substantially. PoW cryptocurrencies really aren't credibly grassroots and have been captured by whales. And there really isn't any application of PoW ledger designs outside of cryptocurrencies with significant mindshare either. For all of this - proof-of-stake cryptocurrencies should be an alternative. Not a direct replacement, but able to cover most use cases.

Coinbase was founded under a different zeitgeist and I don't blame them for jumping into this market. But I think that banning PoW cryptocurrencies should be strongly advocated, and once this realization catches up at the right level, they have a significant liability on their hands.

[0]: For the record, all financial instruments are "made up". PoW cryptocurrencies are the only one that come with blatant resource consumption however.

[1]: https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...

(For the record, if a ban on PoW cryptocurrencies would come into effect today I'd lose money over it.)

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