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Why I have zero faith in crypto venture capitalists

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Re: Why I have zero faith in crypto venture capitalists

#91

Post by hanklazard »

crazygringo wrote: post #71
wyck wrote: post #42

Earlier quoted context omitted.

This opinion is really common, I used to have it but what changed my mind was realizing there are not really any "real world" use cases. I look at crypto as actual money, with the same definition: "money is a verifiable record that is generally accepted". Money in of itself does not have any "real world" use cases, money is money. Money facilitates economic velocity and growth in the same way crypto does, except cryp…

> except crypto has the potential to be more efficient and secure Except that's not clear at all. It's currently less efficient than electronic bank ledgers by many orders of magnitude, in any way you measure -- energy consumption, cost, speed, etc. And it's paradoxically less secure, as tons of successful hacks/thefts have proven. If my bank gets hacked, I'm still FDIC-insured. The courts will make me whole. Crypto…

Agreed on the FDIC (although not everyone banks in the US) part but “speed” is not an area where traditional banks beat the right crypto solutions.

My wife and I just had a major fiasco trying to transfer mortgage payments from one major bank to another. Our credit score was damaged severely. I’ll spare you the details but the diagnosis was eventually determined to be “not enough time for clearance” as in I need to have the money transfer start a full week before it needs to be in the second account. This allows for the typical BS 1970’s SWIFT transaction clearance time, including of course that these transactions “can’t” process on the weekends.

If I could pay with USDC on either the Ethereum or Solana networks, my transaction would clear a few orders of magnitude faster (irreversibly buried in the blockchain within an hr). A friend who works in real estate foreclosures told me that everyone he works with is using stable coins now for this very reason.

Re: Why I have zero faith in crypto venture capitalists

#92

Post by rawtxapp »

valuearb wrote: post #68
danuker wrote: post #62

Earlier quoted context omitted.

> It's effectively just one. To make illegal transactions. Your perspective is limited. Check out my general intro [1] and other articles [2]. TL;DR: at least one legitimate use case is to keep up with inflation. [1] - https://danuker.go.ro/intro-to-cryptocurrencies.html [2] - https://danuker.go.ro/tag/cryptocurrencies.html

Yet BTC is trailing inflation by over 30% the last month alone?

If we are going to cherry pick timelines, might as well compare the price right before money printers went crazy vs now.

Re: Why I have zero faith in crypto venture capitalists

#93

Post by aww_dang »

danuker wrote: post #89
valuearb wrote: post #68

Earlier quoted context omitted.

Yet BTC is trailing inflation by over 30% the last month alone?

Admittedly, there is high volatility due to demand. But as more get-rich-quick people get bored of it, that should stabilize.

Speculative mania is also driven by cheap credit, low interest rates and easy money in the form of direct stimulus.

Re: Why I have zero faith in crypto venture capitalists

#94

Post by notahacker »

asdev wrote: post #67
steveBK123 wrote: post #19

I find crypto super interesting and have dipped my toes in with some small real money just to force myself to try out different products. That said, so far, almost 10 years in, there really are not a lot of real world use cases. Sure there are glorified POCs of things that could potentially lead in the direction of real world use cases. But most of these products/tokens are just extremely meta. Tokens you get paid/pa…

this was also the case with the internet. the world wide web was just an experiment for a long time. applications and their base layers take time to develop. can't rule it out yet. tokens and shitcoins as get rich quick schemes are detracting from the true innovation imo

The World Wide Web was not "just an experiment for a long time". It was released outside CERN in 1991. By the mid 1990s we had a graphic version ordinary people used to browse content which (other than screen resolution) would be familiar today and mainstream corporate participation. After a decade we were past the first bubble and had Amazon and Google.

Re: Why I have zero faith in crypto venture capitalists

#95

Post by sanderjd »

lottin wrote: post #46
borrowcheckfml wrote: post #22

Earlier quoted context omitted.

I think of it like this. Various tokens give you certain types of exposures with different risk profiles. Yields are so high because of the risk. This really isn't so different from the centralized financial system where we have built complex structures (exotic derivatives, structured products, etc) to give you certain types of exposures. The difference is that DeFi is globally accessible and permissionless. Even if…

DeFi can't do much financing at all since smart contracts can only replicate a small subset of financial products which aren't very useful to begin with. Even calling it "finance" is a bit of a stretch.

> smart contracts can only replicate a small subset of financial products

Why?

Re: Why I have zero faith in crypto venture capitalists

#96

Post by vmception »

specialist wrote: post #87
vmception wrote: post #60

Earlier quoted context omitted.

The reality is that we need a new term than ponzi scheme to determine if we are willing to respect a financial model or not The state (us government) has made it clear that there is no distinction it can stand behind anymore sometimes earlier investors get paid out by newer investors whether it’s a high yield investment program, a poorly run hedge fund, or the entire corporate bond market, or social security, or herb…

> need a new term than ponzi scheme "Fraud" works for me. All nascent markets are wildcat melees. https://en.wikipedia.org/wiki/Wildcatter Useful markets are eventually regulated. To save the market from itself, to calm down the townsfolk brandishing pitchforks and torches, to assert central control over a proven grift. Time will tell if all these crypto kittens prove useful for more than fraud.

It doesn’t work for me because it has a legal meaning applied retroactively

Your proposal of using it would at best case simply dilute that word until it was no longer useful, and worst case open its users up to libel due to being a legal term

Re: Why I have zero faith in crypto venture capitalists

#97

Post by humaniania »

wyck wrote: post #42
steveBK123 wrote: post #19

I find crypto super interesting and have dipped my toes in with some small real money just to force myself to try out different products. That said, so far, almost 10 years in, there really are not a lot of real world use cases. Sure there are glorified POCs of things that could potentially lead in the direction of real world use cases. But most of these products/tokens are just extremely meta. Tokens you get paid/pa…

This opinion is really common, I used to have it but what changed my mind was realizing there are not really any "real world" use cases. I look at crypto as actual money, with the same definition: "money is a verifiable record that is generally accepted". Money in of itself does not have any "real world" use cases, money is money. Money facilitates economic velocity and growth in the same way crypto does, except cryp…

Use cases of blockchain maybe. What part of that requires a separate "crypto currency"? Not any legal ones that I can think of.

Re: Why I have zero faith in crypto venture capitalists

#98

Post by short_sells_poo »

hanklazard wrote: post #91
crazygringo wrote: post #71

Earlier quoted context omitted.

> except crypto has the potential to be more efficient and secure Except that's not clear at all. It's currently less efficient than electronic bank ledgers by many orders of magnitude, in any way you measure -- energy consumption, cost, speed, etc. And it's paradoxically less secure, as tons of successful hacks/thefts have proven. If my bank gets hacked, I'm still FDIC-insured. The courts will make me whole. Crypto…

Agreed on the FDIC (although not everyone banks in the US) part but “speed” is not an area where traditional banks beat the right crypto solutions. My wife and I just had a major fiasco trying to transfer mortgage payments from one major bank to another. Our credit score was damaged severely. I’ll spare you the details but the diagnosis was eventually determined to be “not enough time for clearance” as in I need to h…

Are you being purposely disingenuous here?

Perhaps crypto is an improvement over some archaic US banking standards but in the UK transactions will clear basically immediately and cost nothing. A money transfer is asymptotically just updating a couple of database records in a transaction. Execution speed is a technical problem, and one that is not solved efficiently by cryptos.

Finally, most western countries offer an analogue of FDIC for bank accounts. Countries which don't have such a scheme in place need to install one, again its not something that cryptos solve in any (novel) way.

Same goes for half a dozen countries in Europe that I had the fortune to live in.

Re: Why I have zero faith in crypto venture capitalists

#99

Post by dheera »

humaniania wrote: post #97
wyck wrote: post #42

Earlier quoted context omitted.

This opinion is really common, I used to have it but what changed my mind was realizing there are not really any "real world" use cases. I look at crypto as actual money, with the same definition: "money is a verifiable record that is generally accepted". Money in of itself does not have any "real world" use cases, money is money. Money facilitates economic velocity and growth in the same way crypto does, except cryp…

Use cases of blockchain maybe. What part of that requires a separate "crypto currency"? Not any legal ones that I can think of.

If you think legal is good, and you agree with the law, congratulations, you live in a developed country with a mature law system, AND you are probably at least middle class or higher in that society.

There are a lot of people in the world for which the law itself is unethical.

Re: Why I have zero faith in crypto venture capitalists

#100

Post by throwaaskjdfh »

smt88 wrote: post #82
throwaaskjdfh wrote: post #13

Earlier quoted context omitted.

Cryptocurrencies, DeFi, and retail trading are all areas where more skilled traders take money from less skilled traders. These venues can be distinguished from a Ponzi scheme because the participants are traders in a market, not investors in a company or managed financial product.

I agree with you generally and consider stock-picking to be gambling. But retail traders can use the markets to make bets on overall economic growth. Buying a stake in hundreds or thousands of public companies is a clear bet, and you actually do own something in a legal sense. With crypto trading, it's unclear what your bet is -- other than the continuation of the Ponzi scheme. You don't own anything, and the coin ha…

I agree; cryptocurrencies are a scam. But in general they're not Ponzis, with some exceptions e.g. the situation the parent poster describes where VC investors get "early coins" which are sold to later buyers.
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