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The cryptocurrency sell-off has exposed those swimming naked

economist.com

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Re: The cryptocurrency sell-off has exposed those swimming naked

#151

Post by eloff »

ulzeraj wrote: post #63

Tether truthing the eminent doom of tether is all well and good but why aren't we talking more about YCombinator promoting startups that burned their customer's money by sending it to anchor protocol UST ponzinomics while lying that those investments were held in USDC and USD? https://twitter.com/fatmanterra/status/1527153694218797058 https://www.ycombinator.com/companies/stablegains Or is it bad to talk about such t…

It's obvious YC would make some crypto bets. The same way Ark invest is doing on the public markets, YC will do at the seed stage to ensure they have exposure to a market segment that might turn into a big thing (I'm skeptical, but it's not impossible and I don't have a crystal ball.)

What I'm curious about is the initial pitch. Did YC have a way to know that company was a terrible (potentially fraudulent) idea, or did the founders mask it sufficiently that it would have been difficult to tell?

Re: The cryptocurrency sell-off has exposed those swimming naked

#152

Post by gitfan86 »

eloff wrote: post #151
ulzeraj wrote: post #63

Tether truthing the eminent doom of tether is all well and good but why aren't we talking more about YCombinator promoting startups that burned their customer's money by sending it to anchor protocol UST ponzinomics while lying that those investments were held in USDC and USD? https://twitter.com/fatmanterra/status/1527153694218797058 https://www.ycombinator.com/companies/stablegains Or is it bad to talk about such t…

It's obvious YC would make some crypto bets. The same way Ark invest is doing on the public markets, YC will do at the seed stage to ensure they have exposure to a market segment that might turn into a big thing (I'm skeptical, but it's not impossible and I don't have a crystal ball.) What I'm curious about is the initial pitch. Did YC have a way to know that company was a terrible (potentially fraudulent) idea, or d…

Either they are incompetent to realize that crypto is 99% a scam and should be avoided or they knew it was a scam but still thought they could make some money before it all fell apart (Coinbase investors)

Re: The cryptocurrency sell-off has exposed those swimming naked

#153

Post by CPLX »

fleddr wrote: post #140
CPLX wrote: post #103

Earlier quoted context omitted.

Or you could look at the absolutely factual statement that since Bitcoin isn’t a productive asset (in fact it’s the opposite it’s expensive to create) then every single dollar that will ever be taken out of Bitcoin is a dollar that some other person put in. This is not true of normal investments. For example the dollars you get from selling McDonald’s stock 30 years after purchasing it come from people buying hamburg…

No, it doesn't demonstrate that at all. People invest and trade in gold. Which effectively means "gold paper", you don't physically own the gold. In fact, there's 4 times more paper gold than actual gold mined. This type of gold isn't productive. It's not going to be used to make jewelry, it doesn't even exist. It's just a number on screen and a shared belief that it has value. To a degree you can extend that idea to…

Gold is a raw material used in the production of manufactured goods. Which is the literal definition of a commodity. It's not a productive asset either. For the most part investment in gold doesn't produce returns. It's considered something that people hope will stay (roughly) at the same real value because it's scarce.

Apple stock on the other hand takes raw materials like people and chemicals and produces computing devices that are extraordinarily useful. That transformation is the definition of production. The stock value is a NPV calculation of the future earnings of that productive enterprise, which is the interaction of expectations of the enterprise as well as a guess what the cost of capital will be, iterated over many years into infinity.

Just because of the math involved and the iterative nature of the calculation tiny changes in expectations can cause large present value changes, but that isn't really material to the general concept of the enterprise as an ongoing means of producing new, novel, value in the world.

Re: The cryptocurrency sell-off has exposed those swimming naked

#154

Post by fleddr »

CPLX wrote: post #153
fleddr wrote: post #140

Earlier quoted context omitted.

No, it doesn't demonstrate that at all. People invest and trade in gold. Which effectively means "gold paper", you don't physically own the gold. In fact, there's 4 times more paper gold than actual gold mined. This type of gold isn't productive. It's not going to be used to make jewelry, it doesn't even exist. It's just a number on screen and a shared belief that it has value. To a degree you can extend that idea to…

Gold is a raw material used in the production of manufactured goods. Which is the literal definition of a commodity. It's not a productive asset either. For the most part investment in gold doesn't produce returns. It's considered something that people hope will stay (roughly) at the same real value because it's scarce. Apple stock on the other hand takes raw materials like people and chemicals and produces computing…

Ultimately, they're all a number on screen that at bare minimum needs to pertain inflation-adjusted value, and preferably grow. Otherwise there's no point to any of it.

Re: The cryptocurrency sell-off has exposed those swimming naked

#155

Post by eloff »

gitfan86 wrote: post #152
eloff wrote: post #151

Earlier quoted context omitted.

It's obvious YC would make some crypto bets. The same way Ark invest is doing on the public markets, YC will do at the seed stage to ensure they have exposure to a market segment that might turn into a big thing (I'm skeptical, but it's not impossible and I don't have a crystal ball.) What I'm curious about is the initial pitch. Did YC have a way to know that company was a terrible (potentially fraudulent) idea, or d…

Either they are incompetent to realize that crypto is 99% a scam and should be avoided or they knew it was a scam but still thought they could make some money before it all fell apart (Coinbase investors)

Look, I tend to agree with you. Crypto has not found it's use case, it has a lot of scams, a lot of environmental issues, and other problems. It's been many years, it's fair to think if it hasn't found that killer application yet, that maybe it never will.

But it's also still possible that it will. If you make a living by making long bets, then it's completely reasonable to want exposure to crypto.

Re: The cryptocurrency sell-off has exposed those swimming naked

#156

Post by IMTDb »

robbiep wrote: post #75
ulzeraj wrote: post #63

Tether truthing the eminent doom of tether is all well and good but why aren't we talking more about YCombinator promoting startups that burned their customer's money by sending it to anchor protocol UST ponzinomics while lying that those investments were held in USDC and USD? https://twitter.com/fatmanterra/status/1527153694218797058 https://www.ycombinator.com/companies/stablegains Or is it bad to talk about such t…

Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator. You need to make bets everywhere and hopefully some stick. The other side of that is some don’t stick, and some go proper pear shaped. Make enough bets, it has to happen. I’ve got no idea what their original pitch is, I certainly wouldn’t back a crypto startup that ostensibly aims to do som…

> Definitely looks pretty bad - but on the other hand, an accelerator not making any bets in crypto is not a sensible accelerator.

That's why we have the concept of "due diligence". YC is absolutely allowed to make bets in the crypto world; but they have a brand name and a reputation of serious investors. I know that when I see the YC logo on a new product I discover, it serves as a signal. And having a fraud company being allowed to use the YC brand on their website, because YC wanted to work with them and gave them money to allow them to grow (meaning: "cheat on more people") is definitely a stain on their track record

Re: The cryptocurrency sell-off has exposed those swimming naked

#157

Post by wodenokoto »

scotty79 wrote: post #116
wodenokoto wrote: post #36

Looking at Google's 5 year graph of Bitcoin prices, it looks like there were 2 crashes last year of similar size as this one.

You should look at >10 year graph with a log scale. What happens now is mild. Tou can do that here https://www.barchart.com/crypto/quotes/%5EBTCUSD/interactive...

How do you get the log scale to show?

Re: The cryptocurrency sell-off has exposed those swimming naked

#158

Post by gitfan86 »

eloff wrote: post #155
gitfan86 wrote: post #152

Earlier quoted context omitted.

Either they are incompetent to realize that crypto is 99% a scam and should be avoided or they knew it was a scam but still thought they could make some money before it all fell apart (Coinbase investors)

Look, I tend to agree with you. Crypto has not found it's use case, it has a lot of scams, a lot of environmental issues, and other problems. It's been many years, it's fair to think if it hasn't found that killer application yet, that maybe it never will. But it's also still possible that it will. If you make a living by making long bets, then it's completely reasonable to want exposure to crypto.

If you are in the business of promoting your brand to young entrepreneurs, so that they include you in funding rounds, then yes, it makes sense to have exposure to anything that young entrepreneurs are working on.

If you are in the business of owning a piece of any company that may go public via IPO or SPAC one day, then yes, might as well give money to anyone who seems like they may be able to get to that finish line.

If on the other hand you are in the business of predicting the future of technology, it doesn't make sense to have exposure to technologies that are 99% scams on the off chance that someone accidently makes something useful in an effort to get rich. There is a lot of real innovation happening in the world that deserve that funding.

Re: The cryptocurrency sell-off has exposed those swimming naked

#159

Post by webmaven »

nradov wrote: post #143
webmaven wrote: post #137

Earlier quoted context omitted.

It isn't particularly controversial, but who is to say that the founders in question took the advice being given, or even showed up for the feedback sessions? Has anyone ever been kicked out of YC? Given the number of companies that have gone through the program, I'd be surprised if there wasn't at least one that completely ignored everything the founders didn't want to hear or do.

Yes companies have been kicked out of YC. I don't know whether these allegations are true and have no opinion on which party was in the right here. "Dark CEO Paul Biggar said YC booting him for tweeting about internal posts on skipping COVID-19 vaccine lines. Prolific CEO Katia Damer said she was cut after calling out misogyny by YC founders.“ https://www.businessinsider.com/ycombinator-katia-damer-paul... https://te…

Hmm. Both those cases seem to be more along the lines of "said/posted things that made YC look bad" rather than "kicked out for ghosting their mentor" or "kicked out for scamming their users"

Re: The cryptocurrency sell-off has exposed those swimming naked

#160

Post by diggernet »

webmaven wrote: post #159
nradov wrote: post #143

Earlier quoted context omitted.

Yes companies have been kicked out of YC. I don't know whether these allegations are true and have no opinion on which party was in the right here. "Dark CEO Paul Biggar said YC booting him for tweeting about internal posts on skipping COVID-19 vaccine lines. Prolific CEO Katia Damer said she was cut after calling out misogyny by YC founders.“ https://www.businessinsider.com/ycombinator-katia-damer-paul... https://te…

Hmm. Both those cases seem to be more along the lines of "said/posted things that made YC look bad" rather than "kicked out for ghosting their mentor" or "kicked out for scamming their users"

Scamming their users makes YC look bad. Seems like a good reason to boot them.
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