
Introducing A16Z Crypto - mdelias
https://a16zcrypto.com/
======
endlessvoid94
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 solves. It's incredibly cool
technology. That solves a specific problem.

The analogy to the early internet is not a good one. The internet solved a
huge number of problems -- of distribution, of speed to deliver value to the
customer, of freedom of information, of transparency, of fidelity of
communication, and more. That's why it's changed society.

I would love to know which societal problems can be reduced to a distributed
trust problem. That would convince me that I'm wrong about blockchain
technology.

~~~
Jonovono
I don't think it's too hard to find potential problems it can solve, but it's
not necessarily needed to solve it.

1\. Imagine you use FB. Instead of FB having all of your data, it's stored on
the blockchain (encrypted). The problem we have now is if a new social network
comes along if you create an account you lose all of your previous data (which
may or may not be what you want). This would let you easily bring in any old
data that you want.

2\. I want to transfer funds/ownership or whatever to someone in X number of
years. Instead of going through a lawyer, paying money, I make this a smart
contract.

3\. Right now most payment processors do not work with adult industries and
the ones that do charge exorbitant fees. Blockchain can bring those fees down
a lot and let performers keep a lot more of their money.

4\. We rely on sites like stackoverflow and what not. If those sites were to
go down we would lose all of that information (if it wasn't archived). If that
was run on the blockchain as long as a few people were still using the site it
could stay running.

5\. It's also just a solution to the problem of "send money to someone". That
was solved by banks and cash, but blockchain can be another solution that
doesn't require an insane amount of infrastructure, employees, call centers,
etc to run. Ya, it creates its own set of problems (no chargebacks, still may
need escrow services, etc) but maybe those can be run more efficiently than
our current system.

6\. I think voting is something that could happen on the blockchain. Boom, now
anyone can verify the results of the election. People can't _as easily_ scream
election fraud.

~~~
rlucas
What on earth does storage mean in this context: "Instead of FB having all of
your data, it's stored on the blockchain"??

It doesn't mean actually, "store thousands of messages, posts, and photos
literally 'on' the blockchain" because that would get ridiculously unwieldy.

So maybe it means, "store pointers to the above-mentioned data within a
blockchain," which makes for a plausible organizing principle but doesn't
actually do any storage (for which you'd still need technology and a business
model to support it).

I'm only a little bit being snarky here: is there a deeper / more robust
meaning to the shorthand of "we can store [some kind of rich, lots-of-bits]
data 'on the blockchain'" that isn't clear to the dilettante?

~~~
Jonovono
Totally fair point. I don't intend to mean that blockchain works right _now_
for storing all of this efficiently, but I know people are working on
solutions to this. Steemit uses [https://ipfs.io/](https://ipfs.io/) which I
am not super familiar with. [http://swarm-
guide.readthedocs.io/en/latest/index.html](http://swarm-
guide.readthedocs.io/en/latest/index.html) is another.

Another possible solution is something like Torrent, not everyone needs to
have a replication of every single file - it's spread out but decentralised
enough.

And then a non blockchain solution to this is:
[https://tent.io/](https://tent.io/) which from what I understand is more
similar to an email protocol for social networks.

I didn't go into too much depth in any of the points. I am not super invested
in this space, nor up to date completely. It's just been an interest of mine
since 2012 and i've been also trying to come up with real life use cases that
blockchain could solve well.

~~~
leppr
Filecoin, Bluzelle, Sia, Genaro, Arweave, are projects that try to solve
trustless decentralized storage. Most use blockchain as the incentive and
accountability layer only, files aren't stored directly on the blockchain. (Of
these projects, only Sia is currently live)

------
TrevorAustin
Speaking as a longtime skeptic, A16Z has actually produced the single clearest
answer I've seen to that question: blockchains may be good for _bootstrapping
new network effects_ by giving early participants in a network (in a
Metcalfe's Law sense of network) an incentive to participate. Pure utility
tokens can be like call options on the eventual value of the network if it
gets off the ground. It's a novel way of solving a collective action problem.

[https://a16z.com/2017/12/08/summit-crypto-alex-
rampell/](https://a16z.com/2017/12/08/summit-crypto-alex-rampell/)

Kind of like Kickstarter or Groupon, at least in their original incarnations?

~~~
narrator
The best thing I've seen blockchains used for, besides currency, is as an
integration platform for a non-centralized supply chain. There's really no
money in it, since there aren't any gatekeepers, but that's sort of the point.

The idea is that the farmer picks his carrots, puts them in a box and sends
them off to the carrot juice guy. When he does this he puts a upc code on the
side of the carrot box and then puts the code into the blockchain as I shipped
this thing to the carrot juice guy. Carrot juice guy receives carrot juice,
makes carrot juice with carrots in box and then says, I used these carrots to
make this juice in these 300 bottles. <Blockchain> Ships it to distributor.
Distributor says I received these carrot juice shipments. <Blockchain> I then
sold 1-30 to convenience store A <Blockchain>. End consumer bought one at
3:30pm and got sick. You have the record of how it got there and how much time
it spent everywhere, etc. The thing here is there is no centralized supply
chain company who controls everything, everyone just puts it on the blockchain
that NO ONE OWNS. This is a net gain for everybody in the network, but there
is no centralized profit there, except for maybe some systems integrators
working at the edges.

This is why blockchain will probably be this kind of subtle thing that doesn't
make anybody a lot of money, but just seeps into industry over time. It's a
bit like containerization in a way. Huge global impact, but not really any one
company who made their fortune on the container technology itself, but all the
companies around it benefited.

~~~
Max_aaa
How is this being solved by a block-chain?

You still need to trust all the people in the production line (Farmer, Juicer,
Seller and not to mention that transportation guys) that brought the bottle of
juice to market to actually record things correctly into the used block-chain.

The trust required in the data entry "Link/Step" basically results in the use
of a block-chain to be pointless, as trust is already a requirement in this
particular chain of custody.

This is also why the block-chain only really works in Digital Only assets, as
you link the asset it self in the block-chain itself.

~~~
seibelj
The blockchain makes it extraordinarily difficult to tamper with post facto.
As the ledger is distributed with multiple parties and each block is hashed,
it’s exponentially difficult to change later. This means that no centralized
entity can cook the books if a situation arises.

~~~
optimuspaul
But that's the point blockchain is missing. You don't need to tamper with the
data in the ledger because there is no way to put a carrot in it, how would
you prove that the carrot in the juice is the same carrot picked? Technology
isn't going to solve for that without some magical way to identity specific
carrots (or beef, or whatever) that have been transformed into something
else... or even just from another carrot in the next box. Blockchain is
interesting but trust is still required in the system, and in many cases it is
in fact blind trust.

------
TimTheTinker
> Trust is a new software primitive from which other components can be
> constructed.

This kind of talk is extremely misleading. At the end of the day, we're still
people buying and selling goods and services from other people. The most
blockchain can do is remove some types of middle-men (financial or otherwise),
but the endpoints will always be human. Trust between humans will always be a
requirement to buy and sell goods and services.

Just like chatting with someone over an encrypted channel can't make you trust
the person you're chatting with, only the channel itself.

Perhaps blockchain's "killer app" is an automated escrow service. How
exciting... :-/

~~~
rlucas
It is not strictly true that endpoints and the locus of trust always have
humans in the loop. (Where they do, of course, I agree that blockchain has
much more limited "fit" as a solution.)

However, in what I call "network-native resource transactions," namely, where
the provision of the thing of value is computational and can be verified on
the network (think: storage, compute, bandwidth, namespace resources like
DNS), there are a large number of transactions where the performance of the
counterparty can be shown with math.

In those cases, of network-native resource transactions, the transaction
itself can be the locus of trust, and the payment / settlement becomes the
weak link. For this (admittedly somewhat narrow) set of uses, then, blockchain
is _really really_ useful because the payment / settlement trust problem can
be done away with deterministically provided the resource transaction is
verified.

~~~
TimTheTinker
When would this be any more useful than having a credit card on file with
whoever is providing the resource?

...or am I completely misunderstanding what you mean by “payment/settlement”?

~~~
rlucas
I think "payment/settlement" here is clear, but not the link to network-native
resources.

Let's imagine you have an auto-scaling application. You hit a big spike (like
several orders of magnitude) and have the (cryptocurrency) resources to keep
it running.

Traditional vendors on invoice (or on credit card) would likely be loathe to
just approve your monthly spend going from $500 to $500,000. You'd probably
hit an interruption in service as the vendors protect themselves and
underwrite to a higher credit limit.

Having non-repudiable smart contracts that get the vendors paid automatically
once the resources are verifiably transacted would eliminate that friction.

(Plus, chargebacks, interchange, etc.)

On the extreme other end of the scale, if your resource transactions were
small and highly distributed, it would get very cumbersome and costly to
verify and pay $500,000 in $1 increments. (Plus chargebacks, etc.)

My point here is not the traditional one about credit card fees and frictions,
though. It's specifically about the locus of trust.

If you sell me an electric guitar on eBay, there are two big trust gaps: one
is about me actually getting the guitar as described, and the other is you
getting the money. The fact that the "money" happens to be transacted as
bitcoin or whatever doesn't change the need for trust at the ends of the
physical transaction.

But if you are transacting network-native resources, smart contracts let you
connect the payment settlement to the resource itself. Factor the primes out
of this number and you get BTC 1.00. Transit these packets and you get so many
ETH. It's because the resources exist on the same network in approximately
real-time with the payment ledger that they can be verified automatically.

Doesn't work for most kinds of commerce where verifying that the transaction
is settled is a non-computational operation. (Are the goods arrived,
merchantable and fit, as described, etc. etc. -- always you will need to be
putting your locus of trust out in the physical world with reputational ties,
personal trust, escrow agents, brokers / dealers, etc.)

------
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.

~~~
Felz
Trust is inescapable. You've simply shifted yours from reputational trust to
trust in the decentralization of the computing frontier of a specific hashing
problem.

But while reputational trust is cheap and a well-solved problem, the trust
you're using _requires_ large amounts of computing value to be burned
continuously, in the hopes that electricity and computation are decentralized
enough in the real world that multiple non-collaborating actors will be
burning it.

~~~
dperfect
I agree mostly with the point you're making, but there's an important
distinction between "reputational trust" and an assumption that game theory
and market forces will continue to provide the necessary levels of
decentralization for Bitcoin to operate as intended. I'm not sure it's fair to
put those two ideas on equal ground as if all forms of trust should be
embraced because it's "inescapable".

Reputational trust (as you call it) often isn't even based on reputation so
much as military force (sovereign governments). A lot of people - myself
included - would much rather have their finances in the hands of algorithms
and theoretically-sound incentives (even without a 100% guarantee of
decentralization) than in the hands of central banks controlled by the whims
of politicians.

~~~
Felz
In other words, you think that the blockchain setup is more trust _worthy_
than political accountability. That's fine (if not my cup of tea). My point
was that you're still extending the same amount of trust; i.e. you have to
accept things without direct proof in an environment that may attempt to
manipulate you for its own benefit.

It's worth considering what these things are. What you essentially want is:

\- There should be a limited total amount of money

\- Iff people want to give money to somebody else in exchange for something,
they should be able to do so in a timely fashion

\- People should only be able to give away their money

\- There should be no possibility of double-spending.

\- People should generally be willing to accept money for things you want at a
stable rate.

Given that you cannot personally examine every transaction ever made and ask
people if they _really_ wanted to do that at the time, and that you also
cannot control what people want, where does the abstraction you use start
leaking?

------
eblanshey
> In an era in which the internet is increasingly controlled by a handful of
> large tech incumbents, it’s more important than ever to create the right
> economic conditions for developers, creators, and entrepreneurs.

I'm happy to see that people are taking decentralization seriously. Blockchain
has its place as a public ledger, but as everyone knows, scaling it has
issues.

Recently, MaidSafe released a new whitepaper for a new decentralized consensus
mechanism, called PARSEC, which they detailed in their blog post[0]. It does
not use a blockchain. I'm surprised it didn't get more attention. I'd like to
see some serious peer review on the paper.

Perhaps A16Z should get in touch with them?

[0] [https://medium.com/safenetwork/parsec-a-paradigm-shift-
for-a...](https://medium.com/safenetwork/parsec-a-paradigm-shift-for-
asynchronous-and-permissionless-consensus-e312d721f9d8)

~~~
strainer
I've not read the paper but am impressed by their presentation and the
experience and community which they have already created around their
'SafeNet' browser. I'm inclined to believe their mathematical analysis of
their own system is sound. They say its based on a system with proven O(n^2)
messages requirement, with an elaboration reducing message requirement to a
more scalable O(n log n)

------
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.

~~~
leppr
Your conclusion is fair, but at the same time, a certain number of these
"minor variations" will one day be assembled into something just as
revolutionary as Bitcoin and Ethereum were.

If I had to guess I'd say some technology made out of the combination of
blockchain, ZK-snarks, and an homomorphic computation enabler such as SGX
enclaves, will probably be very disruptive to many many fields.

------
vthallam
More and more traditional money will flow into Crypto, not because Crypto is
the answer for everything, but people just want to bet on the something that
might in some form change everything in the future.

I really get surprised by the boolean arguments whether blockchain is of any
use arguments on HN. I mean there's so much activity, money, talent in Crypto
since last year. Goldman Sachs CEO said actually in the nicest way that Crypto
is not gonna be the future [0]. I wonder why we can't have arguments like this
instead of behaving like a know-it-all.

[0]- [https://www.bloomberg.com/news/videos/2018-06-19/goldman-
s-b...](https://www.bloomberg.com/news/videos/2018-06-19/goldman-s-blankfein-
says-he-s-not-worried-about-cryptocurrencies-in-systemic-way-video)

~~~
simias
I come from the other side of the argument: since there's so much money poured
into cryptocurrencies, so many talents spending their days working on it, huge
companies like Goldman Sachs saying that it's the future then what's taking so
long?

I'm not even asking for a killer app at this point, just for a compelling
argument of what the future of a blockchain-powered world will look like. I
don't think I'm a "know-it-all" just for asking for a tangible explanation
which doesn't revolve around a bunch of hand-waving or technically, socially
and economically ridiculous statements such as "imagine Facebook but it's the
blockchain".

Blockchain is not the magic device people make out to be, it's a cool hack but
so far its practical use cases are rather limited. And if you think I'm a
know-it-all for saying that I'm sure that you'll easily be able to shame me
for the fraud that I am by pointing out the multiple problems that can be
solved by the Blockchain more efficiently than with good old technology. So
far all I have is "buying illegal stuff online" and "selling illegal stuff
online". For everything else there's PostgreSQL.

People compare blockchain and cryptocurrencies to the internet or cell phones
but I think it's completely disingenuous. While I'm sure you could find plenty
of naysayers back then who failed to understand the scope of what the internet
would become and how revolutionary it was at the very least easy to see what
it brought to the table. You could communicate with anybody around the world,
play games, maybe even buy stuff. You can argue about how important and
valuable that is, but at least the potential is clear.

When you read these Blockchain pamphlets it feels like they're trying to
convert them to their religion or political movement. It's about user
experiences and decentralization and building blocks of trust. It's about the
power of software and the encoding of human thought. And VR and AR for some
reason.

I say that's just bullshit.

~~~
jsutton
> what's taking so long

This technology is combining software, hardware, game theory, monetary
incentives. It's going to take a long time, and it hasn't even been 10 years.

Picture years from now, and the big buzzword trifecta of blockchain, AI, and
IoT are relatively matured.

Can you really not see the potential in combining autonomous organizations
making decisions on the output of AI that learns from data sourced through
billions of IoT devices around the world?

------
LeoPanthera
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.

~~~
shawnz
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.

------
legulere
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.

~~~
fullshark
The dot com bubble was completely justified in retrospect imo. A lot of stupid
money was lost but the opportunity was clearly and obviously there. If you
think blockchain has as much potential as the dot com bubble you should put a
lot of money into it.

~~~
endlessvoid94
That's an interesting take. I like it.

------
pdpi
If you’re an insider, there’s a somewhat big technical mistake in there that
kind of undermines their credibility.

> Blockchain computers are new types of computers where the unique capability
> is trust between users, developers, and the platform itself.

Trusting somebody implies they’re in a position to hurt you, which makes it
undesirable in a secure system. Unfortunately, trustless systems tend to be
cumbersome and impractical. What makes Bitcoin interesting is precisely that
it’s a remarkably practical system built on a trustless base.

~~~
mgummelt
What are you saying the mistake is?

~~~
pdpi
The “unique capability” of nakamoto consensus is the exact opposite of trust
between parties — it’s that it operates _without_ trust.

~~~
mgummelt
It doesn't operate without trust. It just makes it so you no longer have to
trust banks. But you still have to trust the network.

~~~
pdpi
Sort of — the trust in the network is reduced to:

    
    
        1. I trust nobody has >50% of the hashing power.
        2. I trust network participants to be economically rational actors
    

This is both a much smaller, and much more explicit, set of things you need to
trust than regular banking.

At any rate, the bigger point is that the a16z post describes trust as a
positive, whereas the correct attitude is to treat trust as a negative quality
of a system. Cryptocurrencies are not designed to engender trust, they're
designed to avoid it wherever possible.

------
staunch
> _If there is another “crypto winter,” we’ll keep investing aggressively._

This is how the good investors win. They have real definable thoughts of their
own about technology. The truth is that most VCs aren't much more than bad
money managers that chase other bad money managers around in circles.

It's not that VCs are stupid. It's that _new_ technology is complex and very
few people at all understand it. Even very good technologists can't understand
more than a few areas with any level of expertise.

I really believe that decentralization will blow up the entire VC world itself
but even this phenomenon will be a huge opportunity for some small number of
VCs to profit from. Probably firms doing stuff like this.

------
bawana
The problem w money is that it represents the fruit of human labor but also
allows speculation. We have arrived at a point where accumulated wealth
through speculation that human labor ( and therefore self worth ) are
devalued. That money from financial investments (speculation) can be ploughed
back into speculation removes the human effort that generated the money in the
first place. To restore human value we need a simple restriction. Capital
gains should only be spendable on real stuff - things, services, etc. whereas
money from human work should be unrestricted. The block chain is a perfect
tool to keep track of monetary transactions and would allow automatic
enforcement of this regulation

------
xmly
Blockchain technology itself is not that novel. All the technologies it used
have already been there for a while, even the PoW. But after reading all the
arguments and discussions, my opinion is that blockchain simply reflects the
human's desire for a more transparent, secure and fair IT systems.

Current IT systems work, just it is not transparent, so people do not know
whether it is doing as it claims.

Since there are strong requirements, there will be one revolution. Imagine if
the government adopts such transparent and fair system, who cares whether it
is centralized or not?

So blockchain is simply a strong desire.

~~~
awad
In real world terms...I am currently in the process of closing on a property
transaction. And, while it does take some time, I haven't seen anything during
the process that was immediately made better by what 'blockchain' proponents
purport to be better alternatives.

To be clear, there are certainly inefficiencies I have witnessed. I am just
not clear as to how a blockchain solution, however you define it, helps.

~~~
xmly
It is transparent. If you make a transaction using paypal, you were told the
money is transferred. But how do you know it is true? You have no way to
verify it. Similar problem, facebook and google claim that they are only using
the customers data for certain actions, but how do we verify?

Blockchain only gives the possibility that the IT system could be transparent
and verified by external parties. But Bitcoin blockchain is not the final
solution.

That is it.

------
67_45
This just strikes me as wrong. His chain of logic does not lead to distributed
ledgers. Mainframes, PC's, iPhone, distributed ledgers? Before I dive in I
must say that the new trend for people to use blockchain as a noun describing
the underlying system of Bitcoin and other coins is highly annoying and
cringey. None the less, blockchain is not a peice of technology. It's a
contract backed up by probablity and the nature of the internet. The contract
is a big lumbering thing that has a life of it's own -- for each
implementation of this "tech" you are stuck with that beast which, if you are
even able to get enough people to feed it, will fluctuate wildly in many
capacities before eventually dying. It's not like a new mems accelerometer
where once it's out you can now just pump out thousands of units. The nature
of Bitcoin (i refuse to use the blockchain noun) lends itself much more to
being a global complement to centrally managed monetary systems (or stand on
it's own as the world's currency, but I don't think that would be optimal).

------
chrisco255
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 repositories. For example, a
CRM-focused blockchain might place the business logic for managing customer
relations and sales on-chain and enable competing clients to build on the
protocol. A CRM built in this way might enable multiple "thin clients" to
build and an ecosystem to develop around it. I think we're a ways off, but
that sort of thing is just one of the use-cases that excites me about it.

~~~
vorpalhex
> a CRM-focused blockchain might place the business logic for managing
> customer relations and sales on-chain and enable competing clients to build
> on the protocol

Why.. would you need to put those on a blockchain across a bunch of disparate
consumers? In theory isn't my business logic fairly, you know, secret sauce?

Blockchain is vaguely "A spreadsheet everyone gets a copy of." There are some
cases where that can be useful - usually for verification. There are also some
issues with that - there are no takebacksies if somebody say, publishes
illegal content.

If I want to prove to everyone in Minecraft that I hold a million minecraft
points, a blockchain might be a good answer. If I want to store my secret,
frequently updated business rules with tons of private details about my
clients... why in the world would I use a blockchain?

~~~
chrisco255
Traditionally, yes. But in the same way that Windows OS logic is Microsoft's
secret sauce and yet thriving companies build products and services around
Linux...so too will business-logic be open sourced and compete directly with
existing SaaS players.

Just because you use blockchain to power the engine and business logic of your
application, does not mean you also have to use it to store data. Data can be
stored anywhere else (IPFS, Sia, or even personal PostgreSQL instance).
Blockchains also need not be public. They can be private sidechains that
occasionally interact with the main chain.

Why would you? Because it allows communities of smaller open-source
contributors to effectively compete with big, established players. Also,
through crypto, you could incentivize domain experts to contribute to the
business logic rules.

~~~
MBCook
Microsoft explicitly sells a license to use their ‘secret sauce’. That’s their
business.

I’m not licensing the ‘secret sauce’ that runs my business, so I don’t want it
exposed in the blockchain by my CRM software.

Why in the world would I want everyone to be able to see who my hot leads are
anyway? Wouldn’t that put me at a huge disadvantage?

------
fabian2k
> This trust emerges from the mathematical and game-theoretic properties of
> the system, without depending on the trustworthiness of individual network
> participants.

I'm very uncomfortable with the idea of game theory as the base of trust.
Mathematics as used in cryptography is a pretty solid base, but game theory
feels like something entirely different.

How do I know that there isn't a participant in the game that is willing to
just smash the board? The existing blockchains like Bitcoin do have a certain
amount of centralization, so this is not about a very large number of
individuals where you could find some comfort in statistics. What if a state
actor decides to smash the board, they could probably exert enough pressure on
the large players?

What if there are more subtle ways to extract short term gains that game
theory didn't anticipate?

~~~
DennisP
Protocols don't necessary assume that players are profit-seeking. Ethereum's
Casper for example allows that players may wish to smash the board; however,
it makes attacks very expensive, limits the damage they can do, and makes it
easy for the network to recover.

Subtle ways to get extra gains can be a problem; e.g. people didn't figure out
selfish mining attacks until Bitcoin was several years old. Cryptoeconomics is
a new field, and it advances as people discover attacks and invent solutions
to them.

------
dnprock
I'm a bitcoin skeptic turning to bitcoin owner. For me, it's worth to look at
bitcoin from gold perspective. You can pose similar questions to gold and try
to answer them.

Can I transact with bitcoin/gold?

Is bitcoin/gold a good value storage?

What problem does bitcoin/gold solve?

Is bitcoin/gold solving trust problem?

Any answer for gold can be interpreted for bitcoin. Bitcoin is better than
gold in many ways.

Bitcoin, like gold, is real. Crypto technology is real and works. Bitcoin is
limited. There's a computer network running to support it. Bitcoin is not
tulip.

Gold is still around. I don't think we'd ever ditch it. Why do we value
bitcoin? I don't really know for sure. But I feel certain that bitcoin is
real. And we need to do more work to understand it.

------
pg_bot
As we currently stand the tradeoffs for Blockchain based companies make no
sense in the business world. The author's conceit is that Blockchain based
businesses trade scalability for "trust" and that new business opportunities
will be unlocked due to this capability. The problem with this idea is that
trust is currently not a limiting factor for most businesses. Centralized
services are trustworthy enough for the majority of consumers and are far
cheaper to run at scale.

Every single blockchain based business idea I've heard of would be better
suited as a centralized service. It is my strong belief that a16z will lose
their shirt on this fund.

------
deboboy
The healthcare industry is a POS. If blockchain can make it even 1% better
then it will be worth all the hype and gripe.

------
TrevorAustin
I hope for all of our sakes that it's more profitable for a16z to invest in
real blockchain startups and leverage their experience to uncover exciting,
legitimate applications of the technology than it is to just day-trade cypto
assets.

~~~
atomical
I'm sure it's tempting to use the discount to sell off the principal after the
startup starts trading on exchanges post public ICO.

------
JohnJamesRambo
Hacker News never gets crypto and never will until they are put out of a job
by it.

It’s like trying to get newspaper men to understand what the internet was
going to do to their business.

------
karlmcguire
> Second, the space is developing extremely rapidly, partly because the code,
> data, and knowledge is largely open source, and partly because of the
> increasing inflow of talent.

They seemed to conveniently leave out the biggest driving force behind
blockchain technology: greed. I don't see how you can talk about the "rapid
development" of blockchains and not mention ICOs and the type of armchair
investors who gravitate towards them...

------
projectramo
The problem with the blockchain is that it is distributed, so it can be
inefficient and difficult to gather all of it in one place.

Imagine all the data already stored in one place. This base is private,
entirely yours and it can be encrypted. Only authorized users have access.

This base of data -- I wish there was a better word -- is going to be the next
big thing.

------
nikolay
I cannot think of a single a mass-market problem, which a blockchain tries to
solve, which can't be implemented more elegantly and efficiently WITHOUT a
blockchain!

------
tbodt
You can do the same thing without blockchain.

------
douglaswlance
Would it be possible to build a consensus algorithm for factual information?
Sort of a decentralized fact-checker system

~~~
alehul
That seems like it would be very trivial to game, and additionally while facts
are hard to confirm, a consensus of users who are biased and relatively
uneducated on the topic would do a particularly bad job anyway.

The best similar use case I can imagine is building a system is to evaluate
how much of the media is in agreement on a given topic, and use that to combat
fake news. If a similar headline isn't found elsewhere, give it a low truth
rating.

~~~
hobofan
> a consensus of users who are biased and relatively uneducated on the topic
> would do a particularly bad job anyway

That's why you build the system with an incentive scheme with the contributors
having something at stake, that over time weeds out the incompetent
contributors, similarly to a PoS scheme.

~~~
douglaswlance
That's what I was thinking too. If you have PoS, then the your stake is
basically how trusted you have been throughout the history of your wallet.

------
DoubleCribble
Have there been any attempts to use blockchain in combating a Tragedy of the
Commons?

------
knorker
Don't get your hopes up. This is about crypto _currencies_ , not crypto.

------
antpls
That submission reconnects with the initial YCombinator and Hacker News spirit

------
camdenlock
Wait, what? “Crypto” has been redefined to mean “cryptocurrency” now? Pff.

------
granaldo
prefer they invest in companies than tokens, tokens have been dropping so much
recently [https://www.coingecko.com/en](https://www.coingecko.com/en)

------
chvid
“This can lead people to dismiss them, in the same way people dismissed early
smartphones because they traded off computing power and screen size for
portability and new sensors.”

Right ...

------
root_axis
More breathless fawning rhetoric and nebulous jargon, but I guess the target
audience is blockchain enthusiasts so that makes sense. At the end of the day
it's their money, so what I do I care?

I find it frustrating when I hear comparisons of the blockchain to internet
and cellphone communication platforms. The potential use cases for the
internet and cellphones were immediately obvious (instant remote
communication) and available on day one, compared with blockchains which has
given us bitcoin and nothing else of unique value. I actually think bitcoin is
pretty damn cool and a marvel of software engineering, but it's a fact that
it's mostly useless for the vast majority of people and certainly not in any
way comparable to the impact of cell phones or THE LITERAL INTERNET; the
insinuation is absurd and intellectually lazy based on blockchain's track
record.

> _We believe that just as the last three megatrends -- mobile, social, and
> cloud -- intersected and reinforced each other, so will the next three
> megatrends -- next-gen computing devices, AI, and crypto._

This kind of rhetoric inspires derision.

~~~
bredren
>The potential uses cases for the internet and cellphones were immediately
obvious (instant remote communication) and available on day one, compared with
blockchains which has given us bitcoin and nothing else of unique value.

Bitcoin has unquestionably provided folks looking to work outside traditional
financial systems (and governance) value. You can see it in the black market
use and its use in ransoming everything from Game of Thrones to hospital
records. It was used this way almost from day one.

Also, the use of smartphones as this "instant remote communication" doesn't
begin to describe where the technology led, which was to the smartphone which
is some type of multimedia device capable of far more than its initial
concept.

It doesn't hurt to be skeptical of rhetoric, but you don't make a stronger
point by downplaying the difference in value between when cellphone launched
and what cell phone technology offers today.

~~~
root_axis
> _Bitcoin has unquestionably provided folks looking to work outside
> traditional financial systems (and governance) value. You can see it in the
> black market use and its use in ransoming everything from Game of Thrones to
> hospital records. It was used this way almost from day one._

Yes, I covered that when I said the blockchain gave us bitcoin, and that's all
it's done as far as unique value.

> _Also, the use of smartphones as this "instant remote communication" doesn't
> begin to describe where the technology led, which was to the smartphone
> which is some type of multimedia device capable of far more than its initial
> concept._

So what? My point is that "instant remote communication" was a communication
revolution that did not need to hunt for use-cases, _the technology itself_
was inherently useful and it developed into something more because its
ubiquity (a result of its near universal utility and appeal) created a market
for competition between selling this device that literally everyone wanted.

The blockchain is not at all comparable to this. Most people can't even
understand what the blockchain is (and that includes many technical people)
and those who can at least understand what the blockchain _does_ mostly come
to the conclusion that they don't really have a use case for it (including the
large majority of enthusiasts who don't do more than shuffle bits around
between arbitrarily delimited distributed spreadsheets).

> _you don 't make a stronger point by downplaying the difference in value
> between when cellphone launched and what cell phone technology offers
> today._

You're incorrect. The two have nothing to do with eachother. "Smart devices"
like palm-pilots existed for a long time but never took off because most
people couldn't justify the purchase (since it really didn't do much for
them). Fast forward to a time when everyone is already carrying around
portable network computers because... and here it is again... they were
clearly useful in their communication capability... it was a clever but
natural opportunity to replace these "dumb phones" with computing devices that
resemble computer systems that were already validated by the desktop market.

------
ttul
a16z is just responding to market demand. Regardless of your personal beliefs
in crypto, investors have made a killing, and are convinced that more nuggets
must be out there in those hills... If you can raise a $300M fund and charge
2%/yr to maintain it, that's $6M worth of headcount luxuriously plugging away
up on Sand Hill Road.

Keep in mind: Venture Capitalists mostly invest other people's money, and
charge a great deal to take care of it in the mean time.

------
a16zcrypto
Here's what I don't understand: if you're a crypto project, why wouldn't you
raise funds through an ICO yourself? What benefit does a16z give you? One of
the biggest assets of crypto is the ability to self-fund. Also, since the
space is relatively new, I have my doubts about the ability of a16z to provide
any useful crypto experience.

~~~
pdpi
One good reason is that money doesn’t buy you connections, but an a16z
investment does. Another is because ICOs typically turn your currency into a
security at least temporarily so you might as well play that game properly. A
third one is that, rather than the reputation that comes with an ICO, you’re
instead getting the reputational baggage of being a16z alumni.

~~~
tarr11
> One good reason is that money doesn’t buy you connections

Time for a crypto LinkedIn?

~~~
shawn
BlockedIn

Especially if it works.

More seriously, it's cool that keybase solved the identity problem. It's
traditionally been a very hard thing to know for a fact that you're speaking
with a certain individual, unless they were compromised.

They also have an encrypted github now, which functions very well. And one of
the only realtime chat messaging systems where you can open private chats with
whoever you want, if you know their name.

Point: I think Keybase might increasingly take over the role that github
currently fills. It's hard to imagine now, but people underestimate the effect
of 10 years. And keybase seems to suddenly have a lot of assets that are
_very_ appealing, especially from a crypto standpoint.

If I were trying to topple governments with code, most of my work would be
encrypted on keybase, and my comms (what little there would be) would be via
signal. But my identities would be proven via keybase.

One smart move for gitlab might be to create some kind of realtime messaging
system for programmers, similar to the niche that slack communities currently
fill. Slack never seemed to embrace the community model -- you have to use
hacks just to host a slack community, and then you don't get search for more
than 10k messages, which vanish quickly. Discord has been eating Slack's lunch
from a technical and user count standpoint (though perhaps not profit). Gitlab
could compete by rolling out what slack should have been: an open community-
oriented comms service with tools programmers love, plus a place to host your
code. Discord doesn't have that, and keybase doesn't have very good support
for teams yet.

------
norcalli
I feel like there is some astroturfing going on with this post...

~~~
dang
If you have specific concerns you are welcome to email them to
hn@ycombinator.com, so we can look into it. But please don't break the site
guidelines, which ask you not to post insinuations of astroturfing like this.
(Such insinuations poison internet forums and most often turn out to be
groundless. I've posted a ton about this if anyone wants to read more:
[https://hn.algolia.com/?query=by:dang%20astroturfing&sort=by...](https://hn.algolia.com/?query=by:dang%20astroturfing&sort=byDate&dateRange=all&type=comment&storyText=false&prefix=false&page=0)).

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
buddha
Great!

------
crb002
Sweet. Betting Dwolla gets a chuck of that.

