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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

#221

Post by hanklazard »

sedachv wrote: post #177
hanklazard wrote: post #91

Earlier quoted context omitted.

Agreed on the FDIC (although not everyone banks in the US) part but “speed” is not an area where traditional banks beat the right crypto solutions. My wife and I just had a major fiasco trying to transfer mortgage payments from one major bank to another. Our credit score was damaged severely. I’ll spare you the details but the diagnosis was eventually determined to be “not enough time for clearance” as in I need to h…

> A friend who works in real estate foreclosures told me that everyone he works with is using stable coins now for this very reason. How exactly does that work? Have trustees started accepting stablecoins for deposits? Are there auctions where you can pay with stablecoins? Or is it just for payments from foreclosure buyers to their representatives who make bids on the buyers' behalf?

I believe they were just using it as a method to prove available funds while waiting on the traditional banks / lawyers to do their thing. The more interesting part to me was that he said it was guys in their late 50's / early 60's with backgrounds in construction learning how to use crypto for these foreclosure auctions.

Re: Why I have zero faith in crypto venture capitalists

#222

Post by steveBK123 »

tim333 wrote: post #214
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.

You've missed speculation and gambling. Not to say it's a great use case but it's the biggest. Most people buy them because the number goes up, not to buy drugs etc. Which is perhaps a bad idea but not actually illegal.

Yes, I think this is the 99% use case. A strong indication of this is the fact that they are very volatile and all tend to move in tandem.

Normal, real G7 currencies moving full percentage points in a day is a big deal, 10% moves in a day are very rare, 20% is a once in a lifetime event.

You would expect the different cryptocurrencies to move in different directions and speeds depending on their relative prospects. Instead you have these crazy days where they all go up 5-10% or down 5-10%, over and over. I hold about 8 of them in my wallet and yet still see pretty normal 10% daily moves.

The closest thing this reminds me to is trading bank stocks in 07-08 when everyone was gambling on which would go out of business.

A currency that regularly moves this violently is not an inflation hedge as a savings instrument store of value, nor is it a useful medium of exchange as how do you agree on a price when its moving by the hour.

It is clearly not a unit of measure either given that all the crypto apps report the value of your portfolio in.. fiat. Even these crypto give aways as exchange sign up bonuses or conference prizes are always worded as "$5 of ETH" or "$500 of bitcoin", haha.

A currency that can move 5% on a Sunday afternoon (again) because of an Elon Musk tweet (again) is not something to be taken too seriously (still).

Consider that by comparison, when the UK voted to Brexit, which was not what polls indicated.. a huge economic change with profound generational implications for both GBP & EUR ... GBP-EUR only moved 7%!!

Re: Why I have zero faith in crypto venture capitalists

#223

Post by ineedasername »

ac29 wrote: post #148
ineedasername wrote: post #58

Earlier quoted context omitted.

I don't think you're wrong conceptually. But in practical terms: 1) the traditional options with varying risk profiles are mostly legitimate. The ratio of scam to authentic project is much higher in crypto. Or if not "scam", products where the creators (as pointed out in this article) might be perfectly happy if the product turned out to be successful, but mostly don't care because they make their money up front: rew…

I agree with most of this, but: "SEC has stepped in pretty heavily to classify most crypto as securities" is pretty much not true. The SEC has been pretty heavy handed with ICO's, but most cryptocurrencies are not currently regulated as securities. If they were, all existent US based exchanges would be illegal.

Good point-- You're right, it's mainly ICOs that the SEC has cracked down on. But then very few coins have been given "currency" status, leaving most in regulatory limbo. And the CRT requirement along with suspicious activity requirements already means the government has knowledge of anything but minor transactions if they touch US institutions.

I think governments will be perfectly fine with crypto becoming just another part of the financial infrastructure. And I think the countries dominant in the financial industry will squash anything that looks like a threat to their ability to control their own monetary policy.

Re: Why I have zero faith in crypto venture capitalists

#224

Post by nieve »

sanderjd wrote: post #216
lottin wrote: post #189

Earlier quoted context omitted.

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.

It can if it is written into the contract. I suspect pretty much all contracts will have provisions for this in the future.

There's still the issue of what kinds of trigger circumstances you can commit to code.

Re: Why I have zero faith in crypto venture capitalists

#225

Post by vmception »

shoto_io wrote: post #198
vmception wrote: post #171

Earlier quoted context omitted.

> - discounted and preferential liquidity? Private Equity (PE) investors, of which Venture Capital (VC) firms are a subset, typically buy stakes in organizations that are different and better than what anyone else is able to own. Founders and employees in startups typically get common stock, VC firms typically get preferred stock, a completely separate class of shares that has more privileges than common stock. Even…

Wow. That’s a lot of deep insight. Thanks for sharing! Ad point 1): didn’t that change a bit over the last 1-2 years? I have heard from founders that they have increasingly the upper hand due to the massive capital inflow. This had also led to the fact that founders can now cash out much earlier than let’s say 5-10 years ago, through so called secondaries (?). Ad point 3) I thought a fund first raises x dollars and t…

1) changes constantly. crypto was in a deep bear market till the 9 months ago, despite tech and SPACs going through the roof, capital would have been expensive because there was no competition for the deal. Yes, know the rules to understand where you can bend them.

3) depends on the fund. Both are concepts. Its really up to the manager and if they want to deal with another investors emotions, money talks bullshit walks.

Re: Why I have zero faith in crypto venture capitalists

#226

Post by ganafagol »

xur17 wrote: post #182
ganafagol wrote: post #85

Earlier quoted context omitted.

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.

Same goes for all makers of those "independent games". If just one of those goes rogue, th system is void. You need trust in all of them, not just those that you are playing.

Worse, if your game currency is a decentraliced ledger, then it's much harder to do something about the rogue participant. That's by design. If it's instead a central entity, they can kick out that party on a whim.

Re: Why I have zero faith in crypto venture capitalists

#227

Post by lottin »

sanderjd wrote: post #216
lottin wrote: post #189

Earlier quoted context omitted.

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.

It can if it is written into the contract. I suspect pretty much all contracts will have provisions for this in the future.

No, a smart contract cannot seize assets from another wallet. A key feature of distributed ledgers is that only the person who has the private key to a wallet can move assets from that wallet. If you don't understand this there's no point continuing this conversation.

Re: Why I have zero faith in crypto venture capitalists

#228

Post by indigochill »

arcticbull wrote: post #209
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…

An NFT is simply a signed URL to an image. That the assets are NFTs are meaningless, because (a) they're only relevant in the context of that game and (b) there's no guarantee the hosting will remain (c) they don't come with a license to use or display the asset. No other game developer could create a game leveraging these NFT assets without being on the receiving end of a DMCA claim. [edit] Just try and leverage som…

> It's been 14 years, it's not still early, there's just no "there" there.

Although I agree with everything else you wrote, I don't think this follows.

As a counterexample, Secure Scuttlebutt was created for a specific problem, which was that the creator was a sailor and wanted an offline-friendly social media platform. By using a blockchain, users would have a copy of the database locally that they could interact with and then synchronize when they either cross paths with other sailors (because as long as there's a local network, they can synchronize with peers without the need for internet access) or reconnect to the internet. In this case, the blockchain is relevant in that it enables the network to work independently of internet access and provides decentralized eventual consistency guarantees. A centralized solution would unavoidably require internet access.

It's not a million-dollar idea, and further development is fragmented due to there deliberately being no centralized leadership of the project, but it seems to fit its intended niche use case.

Re: Why I have zero faith in crypto venture capitalists

#229

Post by loceng »

mech422 wrote: post #205
loceng wrote: post #192

Earlier quoted context omitted.

Just one method of collecting more tax money and it's happening: "Biden Wants to Hire 87,000 Additional IRS Agents to Go After Wealthy Tax Dodgers" - https://www.reddit.com/r/politics/comments/nibk03/biden_want... "Biden's $80 billion plan to beef up IRS audits may target wealthy small business owners" - https://www.cnbc.com/2021/05/05/bidens-80-billion-plan-to-be...

That sounded great until the 'wealthy small business owners' part.. So the mega rich get off again... Aannd of course, govt's are already trying to carve out provisions for their local pet industries in the G7 15% corporate tax talks..

'That sounded great until the 'wealthy small business owners' part..'

That would be wealthy small business owners who aren't paying their taxes, I presume. And you're making an assumption "so the mega rich get off again..."

Re: Why I have zero faith in crypto venture capitalists

#230

Post by stiltzkin »

Lordarminius wrote: post #132
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.

I can't believe intelligent people still hold this view.

Not sure if this is from intelligent person.
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