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Introducing A16Z Crypto

a16zcrypto.com

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Re: Introducing A16Z Crypto

#71

Post by dperfect »

Trust isn't really a feature of blockchains, nor is it a byproduct (or "software primitive") of blockchains. Bitcoin was designed to avoid a need for trust, so it really just steps around the issue of trust in a distributed ledger.

This is a critical misunderstanding that a lot of people are still preaching and perpetuating. You can't really build systems that rely on trust on top of a blockchain, and those who have tried are mostly just moving (human/corruptible) authorities of trust to more obscure places. You can, however, build systems that do not require trust on top of a blockchain, though there are some very serious limitations that confine those systems/applications to digital-only transactions.

In other words, I can be reasonably assured that the Bitcoin you sent me is spendable by me (that it hasn't been double-spent) and that a government can't just issue 21 million more Bitcoin tomorrow, but that tells me absolutely nothing about whether or not I can (currently or in the future) "trust" your address on the blockchain, nor can it be tied to any kind of meaningful identity without reintroducing a real-world authority that requires my trust.

Bitcoin has proven itself to be useful on the payment side of transactions, but I'm unconvinced that blockchain tech will ever be able to facilitate the delivery side of transactions (unless it's a digital asset being delivered) without compromising the fundamental aims of Bitcoin.

Re: Introducing A16Z Crypto

#72

Post by sarcasmic »

There's some serious kool-aid going on here, which is unfortunate, because they at least wrote that they're focused on non-speculative use cases. Contrary to the announcement's characterization, crypto-powered platforms don't inherently fulfill the promise of equitable decentralization and immutability.

Ethereum has already demonstrated that one is wise to worry if the rules of the game will change later on. And blockchains enable distributed, trustless consensus, but accomplish it with the majority (50%+1) of vested nodes in agreement, which manifests as either a tenuous truce based on human trust to avoid mutually-assured destruction, or as an anything-goes monopoly where the largest cartel wins. Hardly any different from easier, cheaper ways of accomplishing the same thing.

Bitcoin's innovation was incentive in the PoW block reward, Ethereum's was embedding a VM in the client. Everything else has been minor variations on prior art, or speculative bullshit.

Re: Introducing A16Z Crypto

#73

Post by nostrademons »

Reedx wrote: post #36
legulere wrote: post #25

Or crypto is just another hype that will burst like the dot com bubble. However, I have to say, compared with the companies of the dot com bubble the blockchain space has very little to offer. The other day I saw an ad for an IoT ML ICO.

Or did it already burst like that? Bitcoin was at ~$20k, now it's ~$6k. The dot com bubble didn't have a contraction like that before it popped. That was the pop.

It did, actually, it's just that people only remember the big bubble and big pop.

There was a fairly big bubble over the summer of 1998 that popped in the fall:

NASDAQ: https://goo.gl/7ecN9J

AMZN: https://goo.gl/tjufK8

This also coincided with the fall of Netscape and its eventual purchase by AOL in November 1998. The dot-com bubble that people actually remember got started when that bust hit its nadir (right around the Netscape purchase), and really kicked into high gear a year later in the fall of 1999. I think that what happened is that Netscape's purchase and the subsequent recovery of Internet stocks is what convinced entrepreneurs & VCs that the Internet was here to stay, which led to a flood of capital in and a frenzy of entrepreneurial activity, and then once all their products started hitting the market 6-12 months later the public took notice and the dot-com bubble really took off.

There will likely be a similar effect with crypto as all the ICOs - the ones that are not scams, at least - actually start releasing their products for people to use. Crypto is bubblier than dot-coms because everything is bubblier now; capital markets are thoroughly globalized, and there's more capital sloshing around.

Re: Introducing A16Z Crypto

#76

Post by pjc50 »

endlessvoid94 wrote: post #56
madeofpalk wrote: post #53

Earlier quoted context omitted.

> It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem. That's still not it. "Distributed Trust" isn't a problem, its a trait. What actual problem is solved by distributed trust?

You're right, I pointed to the solution instead of the problem. I'm still an engineer at heart, it seems! What should I have said instead? Centralization of data? Unreliability of single-points-of-failure?

The original bitcoin whitepaper is focused on avoiding double-spend of digital cash, facilitating non-reversible transactions in a way that's not vulnerable to collapse or suborning of the central counterparty. It has the following statement in its introduction:

"Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need. A certain percentage of fraud is accepted as unavoidable."

(No solution is offered for the merchant defrauding the customer, which is the business that ebay was built on solving)

Re: Introducing A16Z Crypto

#77

Post by madeofpalk »

endlessvoid94 wrote: post #56
madeofpalk wrote: post #53

Earlier quoted context omitted.

> It's distributed trust. That's the problem it solves. It's incredibly cool technology. That solves a specific problem. That's still not it. "Distributed Trust" isn't a problem, its a trait. What actual problem is solved by distributed trust?

You're right, I pointed to the solution instead of the problem. I'm still an engineer at heart, it seems! What should I have said instead? Centralization of data? Unreliability of single-points-of-failure?

Solve an actual, real life problem.

All I see are Long Island Ice Tea Blockchain Corp. and Walmat saying that they're using blockchain to help their supply chain (whatever that means).

The reality is is that Blockchain is no longer new. Compare it to iPhone - they both roughly came out at the same time, yet we're still having the same conversations - "What problem does Blockchain solve" - while the iPhone found its place in the market. The reality is is that if Blockchain had a 'killer app' beyond tech bros speculating, we would have found it by now.

Re: Introducing A16Z Crypto

#78

Post by shawnz »

LeoPanthera wrote: post #74

So have we completely lost the battle for the meaning of the word "crypto"? Because I clicked this link expecting to read about a new kind of cryptography.

Agreed, can't believe I am seeing this wrong usage of "crypto" to mean cryptocurrencies right here on HN. So disappointed that A16Z chose this name.

Re: Introducing A16Z Crypto

#79

Post by unabridged »

hacknat wrote: post #40
chrisco255 wrote: post #14

I totally agree with A16Z here. Blockchain skepticism is not hard to find on HN and beyond. First, the ecosystem is vast and evolving quickly. If you've "tuned out" by dismissing blockchain, then don't be surprised when your industry gets disrupted in 5-10 years. I think we'll begin to see business logic open-sourced on the blockchain. For example, existing SaaS model incentivizes closed-source, centrally managed rep…

Most of the people on hacker news, myself included, aren’t skeptical of the technologicy of block chain. I grant Block Chain’s central technical premise, no other medium/platform/whatever can create decentralized trust wherein all you have to trust is the network. Where I think most of the criticism comes from is that many of us don’t see why this decentralization is actually all that valuable. Currency seems like th…

Decentralized trust is a way to "open source" a customer/merchant database. If centralized trust is required the company controlling it can charge people to use it, for example think of listing fees as ebay charging people for access to their seller ratings. Or uber charging people to access its driver ratings.

With decentralized trust we could create a decentralized uber, where drivers get 99% of the money and 1% going to developers and providers of decentralized insurance.

One alternative to decentralized trust would be setting up a nonprofit to control the trust database, but then you are relying on the government to enforce that the nonprofit doesn't gouge the customers, manipulate the ratings, or embezzle the funds. You are basically just pushing the trust onto courts and law enforcement.

Re: Introducing A16Z Crypto

#80

Post by brian-armstrong »

pjc50 wrote: post #67
endlessvoid94 wrote: post #29

The skepticism of blockchain technology is borne out of a lack of specific problems it solves. Which happens to also be the bedrock of the conventional startup wisdom -- value derived from solving a problem or exploiting an opportunity. So much of the blockchain hype is focused purely on the technology and the valuation of the tokens / coins. Not the problem it solves. It's distributed trust. That's the problem it so…

The only one I've seen that might go somewhere is filecoin. However, I think people are underestimating how the market for ""enterprise private blockchain"" will play out. The same organisations that spent money on X509 PKI non-solutions will pay millions for blockchain. At this level, nobody likes talking about the problem solved. It's solutions all the way, especially enterprise solutions.

Great. Let’s all get rich writing a bunch of do-nothing software that will get thrown out in 5 years.
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