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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

#181

Post by xur17 »

throwaaskjdfh wrote: post #100
smt88 wrote: post #82

Earlier quoted context omitted.

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.

To be clear, you're saying that you believe that every last cryptocurrency is a scam with no exclusions? To me it seems absurd that none are non-scams, and makes me think you're just making baseless claims.

Re: Why I have zero faith in crypto venture capitalists

#182

Post by xur17 »

ganafagol wrote: post #85
indigochill wrote: post #20

Earlier quoted context omitted.

In theory, a crypto project could provide value (not money, they're different things) to its users. For instance, there are experiments with distributed games where assets are NFTs. In theory, this provides the basis for independent games sharing unique assets among themselves. In practice, nobody's doing this (even those game devs who are minting assets as NFTs are keeping the assets to one game, making the whole ex…

There is still no value over a trusted third party, keeping all this in a central database. These games you are talking about just agree on this third party and that's it. And they already do that. The third party is states backing traditional banking systems.

> There is still no value over a trusted third party, keeping all this in a central database. These games you are talking about just agree on this third party and that's it.

There is value - with a trusted third party, you are "trusting" that the third party will stick around, won't block you, and won't arbitrarily change the rules on you.

Re: Why I have zero faith in crypto venture capitalists

#183

Post by mech422 »

slg wrote: post #178
mech422 wrote: post #172

Earlier quoted context omitted.

They literally threw the country into a recession? Also, the average person isn't writing mortgages. A better example might be the average investor in a company. The average investor loses everything if a company goes under. Some creditors might get paid, and if they're lucky some 'preferred stock' holders might get something. But the average person (common stock) loses everything they put in.. I'm not really seeing…

>I'm not really seeing much of a difference ? There is risk in everything...If you can't afford to lose, then don't bet? The difference is that intrinsic value provides a floor for potential losses and therefore reduces risk. If you can't understand why a worst case scenario of losing 20% of your investment is better than a worst case scenario of losing 100% of your investment, then I don't think you and I are going…

Wow - I specifically called out that most people don't write mortgages, presented what I thought was a relevant scenario for the 'average person' ...

And you specifically go out of your way to pretend you didn't see it/understand it? Yeah - 'constructive' doesn't seem to be likely

Re: Why I have zero faith in crypto venture capitalists

#184

Post by sanderjd »

sanderjd wrote: post #164
BobbyJo wrote: post #155

Earlier quoted context omitted.

I think making promises and taking money from people based on promises you very likely can't fulfill is enough to label something as a scam, and that seems to be the case with all of the points mentioned above.

Is this also true of all startups that take funding and then fail? That would be one reasonable definition of "scam" I think, but personally I think it is more useful to have different terminology for speculative high risk ventures that make a good faith effort but fail vs. malicious schemes designed only to take money and run. I think there are lots of both things in this cryptocurrency space, but I think it's reduc…

Debating myself a bit: the reason startups tend to attract fewer scams is that only accredited investors can invest in them. There is definitely something to be said for that!

Re: Why I have zero faith in crypto venture capitalists

#185

Post by sanderjd »

lottin wrote: post #173
sanderjd wrote: post #95

Earlier quoted context omitted.

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

One of the reasons is that many financial contracts have provisions to seize assets under certain circumstances. This is not possible with DeFi because DeFi is built around "unconfiscatable" digital assets.

I believe it is possible to write in provisions for some actor or set of actors to seize assets in a smart contract. This doesn't seem common either because of immaturity or just culture, but I don't think it is impossible.

Re: Why I have zero faith in crypto venture capitalists

#186

Post by antifa »

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…

I'm sure these are great criticisms but you didn't describe scams and I'm surprised you didn't start with something obvious like NFTs.

Re: Why I have zero faith in crypto venture capitalists

#187

Post by theK »

IAmGraydon wrote: post #43
borrowcheckfml wrote: post #29

Earlier quoted context omitted.

I think it's arguable what real investments are. How "real" is the stock price of Gamestop? Aren't most prices just driven by imaginary narratives? Investors rarely care about dividends. There are also DeFi projects that are based what you call "real investments" such as stablecoins, synthetic assets for stocks and commodities, etc. When the backing/staking mechanism for these works as intended, they are just as real…

> Investors rarely care about dividends. This one statement reveals that you have zero idea what you’re talking about and are just presenting yourself as knowledgeable. Why do that?

I can see this being true in the stocks world. A lot of companies have IPOed without a plan for dividend payouts because their main business plan is investment in expansion. People who jumped onto amazon and tesla may have made fortunes but have gotten exactly 0 dividends.

Re: Why I have zero faith in crypto venture capitalists

#188

Post by crazygringo »

xur17 wrote: post #170
crazygringo wrote: post #119

Earlier quoted context omitted.

Cash is instant. Venmo is instant. You can pay for goods with a credit card and know it was approved instantly. In the very rare case you need to make a domestic wire transfer, yes it's currently slow, but that's not a technological problem, it's a political/institutional one. Plenty of countries have instant bank transfers as well. AND -- instant bank transfers should be coming to the US in 2023, when FedACH is supp…

Venmo isn't instant in the same way that USDC is though. When a USDC transaction settles, I know the money is mine, when a venmo transfer settles, or an ach transfer settles, there is an opportunity for the money to be clawed back for quite a bit of time [0]. We can argue if this is a good or a bad feature, but it does mean that the transfer really isn't instant as I don't have guarantees behind the money being mine.…

Venmo is instant.

Clawbacks are an entirely different matter.

And while yes, the absence of clawbacks means your money is then "yours", it also means that if you're hacked or defrauded, there's no way to recover funds because it's now "theirs".

For people who aren't engaged in illegal activity, the ability for banks and courts to retrieve illegally (or even accidentally) transferred funds is widely seen as a feature. Most people prefer the legal system to be able to ultimately determine who owns money (or real estate or shares of a company), instead of something anonymous and irreversible. After all, enforcement of property and contracts is the main reason government even exists, if you're a libertarian -- which means restoring property in case of theft and fraud and breach. (If you're a regular liberal or conservative, then it's one of the main reasons.) Are you suggesting it's beneficial for cryptocurrencies to be outside the realm of property rights and the legal system?

Your concerns about your funds being "yours" are really only worth worrying about if you live in a failed/anarchic/warlord/etc state... which fortunately isn't the case for most HN'ers, or most people generally.

Re: Why I have zero faith in crypto venture capitalists

#189

Post by lottin »

sanderjd wrote: post #185
lottin wrote: post #173

Earlier quoted context omitted.

One of the reasons is that many financial contracts have provisions to seize assets under certain circumstances. This is not possible with DeFi because DeFi is built around "unconfiscatable" digital assets.

I believe it is possible to write in provisions for some actor or set of actors to seize assets in a smart contract. This doesn't seem common either because of immaturity or just culture, but I don't think it is impossible.

No, that's not it. An actor must be able to seize assets from another actor, under certain circumstances. That can't be done with smart contracts because of the security model of blockchains.

Re: Why I have zero faith in crypto venture capitalists

#190

Post by Growling_owl »

Crypto VC understand that how people feel about something is just important as its utility.

People have a deeply rooted fear of inflation, they are afraid of being diluted in their societal standing. They also have a strong preference for deflation which allows them to do work once and then see their past work appreciate in value.

Enter Bitcoin.

Bitcoin wins because it's giving to the market what existing players (meaning governments) won't do: a deflationary currency.

Governments won't give people a deflationary currency because they project what is going to happen with a deflationary currency and they don't like the total chaos which would mean for the country, but the real world doesn't work that way, the population wants to try and see for themselves what are these outcomes, and if they are less taxing than inflation.

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