“You Don't Own Web3”: A Coinbase Curse and How VCs Sell Crypto to Retail

That seems to be the whole point of “crypto” (I.e. selling facsimile securities to avoid regulation)

i think the point is to benchmark the “what if i did invest in FileCoin” v.s. the “what of i didn’t invest in FileCoin” case. where would your $ be if you didn’t invest in FileCoin? for a lot of people actually making that decision, the default place that money would be is one of Eth/Btc/stablecoins with yield (debt based)/S&P 500 (totally different regulatory area). so if you want to look at the “what if i don’t invest” scenario, without radically changing the other preferences of where that money goes, Eth/Btc comparisons seem pretty reasonable.

Anything I talk about below is not financial advice. Full disclosure: My crypto holdings consist of around 1 ETH and $5 worth of BTC on Coinbase.

Anyone remember Monero? A POW crypto using state of the art cryptography such as ring signatures and Bulletproofs to guarantee private, secure transactions? It's secure enough that almost half of all dark web transactions are done using it despite its market cap being a fraction that of BTC. So secure that the IRS put out a $675,000 bounty for anyone who could find critical vulns. There's RandomX which is Monero's POW algo which is designed to run best on general CPUs and actually run terribly on ASICs? And to top it off, it has transaction fees in the fraction of cents.

With all of the talk by many crypto hustlers about banking the unbanked, "digital freedom", etc., that Monero would be perfect! So, why aren't VCs pouring money into developing it like they are into new web3 stacks?

It's because it's old news. It doesn't get enough eyeballs like a listing on Coinbase. You can't build digital fiefdoms using Monero, no ICOs, no pump and dumps. You can't have middlemen like OpenSea skim off the top and gatekeep. There's no artificial scarcity of coins. Monero isn't "useful" for the vision of web3 that investors have.

Most people don't have the time to read through every single whitepaper put out. It's easier to join a Discord server waiting for an airdrop, to read a bunch of Tweets, and check what's on Coinbase. It's just more convenient.

True, Monero doesn't have smart contract support and there are things like Tornado Cash which can emulate what Monero offers. Monero is still a sizeable player in the space and a lot of developers behind it. On top of that are all the controversies around Monero such as certain bad actors abuse CI integration services to mine it. But as the article points implies, for the majority of crypto investors/whales it's mainly about making a quick buck before moving on to the next pump.

I'm optimistic for a crypto future. Smart contracts are a great idea (though there's polishing needed) and there are other decentralized technologies out there I'm excited for. The Ethereum Foundation, Starkware, and others have helped push new and exciting cryptography research. Hopefully when the next correction comes, all the noise dissipates from the space.

Coinbase got a slap on the wrist for their Litecoin adventure so there's no reason to stop now.

Moxie Marlinspike had a good take on this, specifically about NFTs being a blockchain with a web link to the “asset”. Whoever controls the server (or DNS) controls the “asset”. If I was to seriously entertain the notion of NFTs I’d at least want my token to be a hash of the “asset” in question (or hashes, computed with differing algos, in case of collisions). Anything else is a non starter. We’re one hilarious hack away from some $50m NFT being turned into a collage of dicks.