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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

#21

Post by ralusek »

giansegato wrote: post #3

The 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 think why people treat them differently comes down to informed consent. With a true Ponzi scheme, the managing investor makes you believe that they're doing something that they're not. You think you're investing in some underlying asset, but you're just buying out they previous wave of investors.

With crypto/VC/normal stocks all having many characteristics in common with Ponzi schemes, at least the game is relatively well understood. For all of them, there are institutional investors capable of market manipulation, as well as the information and know-how so as to typically adjust their positions so that the majority of the people left holding the bag are retail investors.

Re: Why I have zero faith in crypto venture capitalists

#22

Post by borrowcheckfml »

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…

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 DeFi never moves beyond these "financial speculation" use cases, if it replaces what's currently centralized in government-regulated financial markets, that's a multi-trillion dollar opportunity.

I'm doubtful we'll see any retail use cases or mass option beyond speculation soon, just like your average retail user does not buy exotic derivatives. That doesn't mean it's not useful.

Re: Why I have zero faith in crypto venture capitalists

#23

Post by indigochill »

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.

There are games that are thinking in this direction or are already implemented this way. For example: https://www.kotaku.com.au/2021/05/how-a-philippines-communit...

But it's financially just like poker. Even at best, value isn't being generated, it's just being funneled from suckers to sharks (and the house).

Re: Why I have zero faith in crypto venture capitalists

#24

Post by edent »

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 does that require crypto though? Why not Euros, Dollars, Pounds? Or even XBox Live Points?

Re: Why I have zero faith in crypto venture capitalists

#25

Post by slg »

borrowcheckfml wrote: post #22
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…

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).

Re: Why I have zero faith in crypto venture capitalists

#27

Post by dd36 »

borrowcheckfml wrote: post #22
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…

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…

But governments regulate because before regulation, it was a scammers paradise.

Re: Why I have zero faith in crypto venture capitalists

#28

Post by iSnow »

So basically the first example is of a coin that was never launched and the chart is from some wildcat clone someone else launched. The second one took 3 weeks to reach peg but then did.

IDK, I DO think there's too much money flowing into crypto startups lately, but the article is about as poor as the dd of some in the space.

Re: Why I have zero faith in crypto venture capitalists

#29

Post by borrowcheckfml »

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).

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 as any derivatives on these assets in the traditional financial markets.

Re: Why I have zero faith in crypto venture capitalists

#30

Post by ericbarrett »

leifg wrote: post #5

It’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.

I’ve always considered unregulated advertising claims to be a reflection of the weakness of the product: A food with “Quality” in the brand name is almost always the low-shelf cheap version. “Comfort” in a motel means you’ll have a cheap bed and noisy, rattling air conditioning. Etc.

The unbridled crypto space is chock full of these signals.

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