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Why I have zero faith in crypto venture capitalists

bennettftomlin.com

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Re: Why I have zero faith in crypto venture capitalists

#101

Post by barnabee »

I’m not sure this article understands how VCs in general often operate. I’ve met many VCs who will invest in a team with barely an idea, or where they have a lot of scepticism about the idea, because they believe the team have a sufficiently high chance of figuring it out, or executing and scaling, and generating the outsized returns they need — whether with the original idea, a heavily evolved or refined version of it, or a complete “pivot”.

The lack of rigour around the specifics of the idea, the tech or maths behind it, etc. is not new or unique to crypto VCs (look at some of the nonsense that gets funded!). What’s more unusual is that anyone can often read the same papers and look at the code and decide the idea is dumb/illegal/won’t work. We can’t usually see what it is that made the VC invest, though.

But sure, if you’re looking for VC funding as a signal of great tech or an obvious market need or problem being solved, you have to at least be really picky about which VCs you follow and how much you read into their pronouncements (some are surely better than others, though).

Also, those projects that do have good tech and a viable product/solution will almost certainly benefit from the support of top quality VCs.

Re: Why I have zero faith in crypto venture capitalists

#102

Post by mech422 »

treis wrote: post #59
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…

> there really are not a lot of real world use cases. It's effectively just one. To make illegal transactions. That's a long list of things: drugs, hiding wealth, evading currency controls, extortion, and so on. Otherwise, existing currency and transfer mechanisms are more or less available and convenient.

Huh - so lets see... NewEgg accepts(1): Doge, Bitcoin, Ethereum, Bitcoin cash, etc. Telsa may or may not accept Bitcoin depending on Elon's mood. And El Salvador just made bitcoin legal tender. Yep - those are all illegal transactions.

Your argument boils down to "Only criminals use Tor"... Not very useful.

1) https://kb.newegg.com/knowledge-base/using-crypto-on-newegg/

Re: Why I have zero faith in crypto venture capitalists

#103

Post by sintaxi »

intuitionist wrote: post #73
runawaybottle wrote: post #4

Honestly, 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.

Why would Epic want to build Fortnite dollars as a slow distributed ledger instead of keeping it centralized? And why would they want to let you redeem for dollars?

There is no reason the purchase of a purple bazooka in a video game needs to be confirmed by thousands of nodes so someone like Epic would keep the crypto centralized and therefore fast. They wouldn't need to "let you redeem the bazooka for dollars" since there will be people who want the bazooka and would be willing to purchase it from you. Epic would then have the power to mint new bazooka's in order to raise funds for their development. The issue at hand is how does Epic do any of this without going to jail for breaking securities regulations.

Re: Why I have zero faith in crypto venture capitalists

#104

Post by danuker »

vgatherps wrote: post #37
artfulhippo wrote: post #17

Earlier quoted context omitted.

Internet Computer aka DFINITY is not a scam. The price action is fishy, but when you investigate the project’s vision, the technical architecture, the team behind it, and the community building on it, you’ll discover that it’s perhaps the most serious, innovative, and ambitious system out there.

I agree that people often use scam to mean “it’s not worth what people think it is”, “this is going to be vaporware”, “this doesn’t have much real world use”. I expect that the folks at DFINITY are actually trying to build something. But it’s a little beside the point. I’ve seen some of how the sausage was made in creating and listing new crypto projects, and it’s pretty ugly. There’s a lot of focus on pumping, shill…

I chuckled at the analogy with sausage-making. Thank you for getting your point across!

Re: Why I have zero faith in crypto venture capitalists

#105

Post by mech422 »

slg wrote: post #25
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…

Except those "exotic derivatives, structured products, etc" do have real investments at the heart of them. What is at the heart of those "DeFi" investments? It seems to mostly be criminal and criminal-like behavior (this includes transferring money in ways the local government doesn't approve of which can admittedly be great if the local government is oppressive).

>>Except those "exotic derivatives, structured products, etc" do have real investments at the heart of them.

Hmm...2008 housing crash and the recession that followed beg to differ.

Re: Why I have zero faith in crypto venture capitalists

#106

Post by DogOfTheGaps »

mech422 wrote: post #102
treis wrote: post #59

Earlier quoted context omitted.

> there really are not a lot of real world use cases. It's effectively just one. To make illegal transactions. That's a long list of things: drugs, hiding wealth, evading currency controls, extortion, and so on. Otherwise, existing currency and transfer mechanisms are more or less available and convenient.

Huh - so lets see... NewEgg accepts(1): Doge, Bitcoin, Ethereum, Bitcoin cash, etc. Telsa may or may not accept Bitcoin depending on Elon's mood. And El Salvador just made bitcoin legal tender. Yep - those are all illegal transactions. Your argument boils down to "Only criminals use Tor"... Not very useful. 1) https://kb.newegg.com/knowledge-base/using-crypto-on-newegg/

Purchasing items on NewEgg with USD is simple, easy, and very fast. If you are using a credit card, you get additional benefits and protections. Additionally, per the link you provided, there are a number of restrictions on using crypto on NewEgg. What is the benefit to using crypto vs using a credit card?

Re: Why I have zero faith in crypto venture capitalists

#107

Post by colesantiago »

applepple wrote: post #81
cinntaile wrote: post #65

Earlier quoted context omitted.

Don't go and claim the vast majority of top projects are essentially scams, that's just spreading false information.

Name any major project and I can tell you why it's a scam. Bitcoin: Uses the electricity of a country to process 2 transactions per second. Layer 2 solutions such as Lightning Network have some significant drawbacks which make them unpractical and vulnerable to multiple attacks. They've been trying and talking it up for years - No results. Ethereum: Doesn't scale. The entire ecosystem (including all ERC20 tokens) tog…

So Stellar, Cardano and XRP are all scams?

> Polkadot: They claim everywhere to have 'Parachains'. The reality is that this feature doesn't exist yet.

So it's a scam because it doesn't exist yet and it's planned on the roadmap?

That's like saying Ethereum 2.0 is a scam because it doesn't exist yet.

It's extremely easy to call projects scams when you're not the one doing the work.

Re: Why I have zero faith in crypto venture capitalists

#108

Post by mech422 »

slg wrote: post #56
borrowcheckfml wrote: post #44

Earlier quoted context omitted.

And crypto projects that are derivatives on real world assets, like fiat currencies (stablecoins) or stocks (synthetic tokens), have equivalent backing. If the project were to dissolve, there would be assets backing that. Not suggesting this is the case here, but I keep seeing this worrisome trend where people are stuck in the Bitcoin and ICO world from 5 years ago and think nothing has changed and they don't really…

What percentage of cryptocurrencies are backed by real world assets? Who ensures that this backing is actually baked into the cryptocurrency and isn't just some marketing speak? For example there is Tether which claimed to be backed by USD. "[I]t turns out that the stablecoin that used to say it was 100 per cent backed by cash reserves is in fact . . . 2.9 per cent backed by cash reserves".[1] [1] - https://www.ft.co…

And Theranos claimed to have working machines...

Risk is risk - in stock, crypto, or life in general.

Re: Why I have zero faith in crypto venture capitalists

#109

Post by steveBK123 »

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…

The potential future use cases become clear in some future world where you can pay for real goods & services in said crypto. Then all the DeFi stuff replicating the existing dollar financial services industry in decentralized form makes sense. In the current world, its just circular references with a lot of fraud.

Re: Why I have zero faith in crypto venture capitalists

#110

Post by sintaxi »

egypturnash wrote: post #57
runawaybottle wrote: post #4

Honestly, 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.

“Pay-to-win” is generally not considered to be a recipe for fun games, as far as I know. Having a sudden flood of rich assholes coming in and crushing people because all the best guns are a trivial real-money purchase for them sounds like a good way to kill a game.

People value cosmetics and will pay through the teeth to have the only gun that shoots blue fireballs instead of orange - especially if said gun was introduced to the public through a partnership with Ninja or PewDiePie.
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