Why I have zero faith in crypto venture capitalists
bennettftomlin.com
Why I have zero faith in crypto venture capitalists
1–10 of 242 posts
Re: Why I have zero faith in crypto venture capitalists
#2Would you say that the relation is... trustless?
Re: Why I have zero faith in crypto venture capitalists
#3The VC model has always flirted with being a Ponzi scheme, but ultimately some startups _do_ make money somewhat consistently, so the model is risky but fair to retail investors.
But a crypto project is not a traditional scalable company. It does not make money as platforms traditionally do. It's open source and distributed.
I truly cannot understand how it differs from a huge Ponzi scheme.
Re: Why I have zero faith in crypto venture capitalists
#4Honestly, all these cryptos have to do is bake themselves into in-game currency for any video game. Fortnite crypto could be a multi billion dollar market.
I would love to just buy an army in Starcraft, pillage your base and take your crypto, then sell it on Coinbase. If we are truly to live in a job-less world with basic income, I’m gonna need shit to do.
Re: Why I have zero faith in crypto venture capitalists
#5It’s always hilarious to me how so many crypto/blockchain startups have words like “trust” and “transparency” written all over their landing pages.
In reality you have an insane amount of fraud and shadiness going in order to increase some arbitrary token value.
Re: Why I have zero faith in crypto venture capitalists
#6For example look at the real price history of a VC funded token called "Internet Computer" [0] by selecting "ALL" on Coinbase. Out of no where on launch, it was listed on Coinbase and Binance already with the top 10 coins of the largest market capitalisations. Only VCs and angel investors with such connections to these exchanges could have made such a listing like that possible.
After that, then came the VC dump with the price now at $59 - $60 for weeks with the bagholders entering at >$200 or >$400 on listing day.
When I see charts like that, that is what you call a VC pump and dump.
Re: Why I have zero faith in crypto venture capitalists
#7Venture capitalists are in the “buy low, sell high” business.
Their motivation is not “is this thing I’m buying going to be useful to someone?” (although that’s a nice side effect that gives them something to talk about at parties.)
Rather it’s: “Can I offload this thing I bought with exclusive access to someone else in a reasonable time horizon?”
Tokens and other crypto investments have been attractive to VCs because there was a steadily rising level of interest and a regular cycle of hype booms that make for great exit opportunities. (See the timing of Coinbase IPO.)
If there’s a good chance of exit in 3-5 years, it makes absolutely no difference if the project never ships anything.
Re: Why I have zero faith in crypto venture capitalists
#8Honestly, all these cryptos have to do is bake themselves into in-game currency for any video game. Fortnite crypto could be a multi billion dollar market. I would love to just buy an army in Starcraft, pillage your base and take your crypto, then sell it on Coinbase. If we are truly to live in a job-less world with basic income, I’m gonna need shit to do.
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Re: Why I have zero faith in crypto venture capitalists
#9Honestly, all these cryptos have to do is bake themselves into in-game currency for any video game. Fortnite crypto could be a multi billion dollar market. I would love to just buy an army in Starcraft, pillage your base and take your crypto, then sell it on Coinbase. If we are truly to live in a job-less world with basic income, I’m gonna need shit to do.
Sounds like you want to play Eve Online
Re: Why I have zero faith in crypto venture capitalists
#10The VC model has always flirted with being a Ponzi scheme, but ultimately some startups _do_ make money somewhat consistently, so the model is risky but fair to retail investors. But a crypto project is not a traditional scalable company. It does not make money as platforms traditionally do. It's open source and distributed. I truly cannot understand how it differs from a huge Ponzi scheme.
I agree with you, but looking at what comes out of Silicon Valley these days, there is a fine line between "ponzi scheme" (in the broad sense) and "re-invest everything in growth and hope to get acquired". I'd push back that many traditional startups, most of which end up never being profitable but still exit in one way or another due to hype and investor relationships, are just as close to pump and dump schemes as many crypto projects are. It just isn't as obvious because the time scale is usually a bit longer.
> But a crypto project is not a traditional scalable company
Why is that true? There are DeFi crypto projects that are scalable companies with big revenue streams. Sure, the space is driven by speculation, but you can argue the same about Robinhood.