Relaynode SoCal: September 9, 2019 – Relaynode SoCal
If he’s “confounded”, then I’m befuddled
Today I’m completely befuddled by the future of crypto. Don’t get me wrong, I’m certain that this industry will exist in some form in a decade. I’m certain there’s demand for a non-sovereign, digital, permissionless, store of value. I’m certain crypto companies will contribute other important infrastructure such as self sovereign identity, privacy, & data rights (see my previous post). However, I’m uncertain how it is all going to play out and who the winners will be. The deeper I go, the less I know. In truth, no matter how intelligent, experienced, or noisy the talking head, no one really does.
Last week, Fred Wilson, the founder of Union Square Ventures and an early crypto adopter announced that he was “confounded” by Ethereum which remains “hard to build on” as “scaling issues abound.” One day later, Fred admitted he was “schooled” on Crypto Twitter for the post.
If this VC legend is so confounded, then it’s no surprise that I’m so befuddled.
Only 4 days prior to Fred’s post, his former USV analyst, Joel Monegro (founding partner at PlaceholderVC), released a completely divergent view. Monegro likened Ethereum to IBM and all of Ethereum’s would-be competitors to the “seven dwarfs” — these were the other computer makers of the late 20th century who only captured niche markets in the shadow of IBM’s dominance.
Monegro believes that Ethereum’s distribution advantage will be insurmountable for competing smart contract platforms (even those with better tech). He cites Ethereum’s “millions of users, thriving developer ecosystem, useful applications, & robust infrastructure.”
“Seven dwarfs” is an understatement. In the next twelve months, 16 new smart contract platforms are expected to launch mainnets beginning with Hashgraph next week (see more on this below). Many tout better tech than Ethereum, but will this be enough or is it already too late?
To make things even more confusing, leading voices in the Ethereum community have converged on the thesis that ETH is a programmable store of value (pSOV), placing it in direct competition with Bitcoin. Many believe that “without a monetary premium ETH is dead.”
This leads to a few unanswered (at least for me) questions that might help us better understand the future of this industry.
- For a smart contract platform to win adoption, must it be money?
- If not, how should we think about network valuation?
2. More specifically: is ETH money?
- If so, is Ethereum in direct competition with Bitcoin (BTC)?
- Is that a competition that it can win under its current governance model?
- If not, is Ethereum’s current $20Bn market capitalization justifiable?
3. Does Ethereum have both insurmountable distribution advantages and network effects?
- Is 1,200 core developers meaningful? Yes, it’s 4x the next largest protocol, but for comparison, Unity has over 1m developers.
- How difficult will it be for a competing smart contract platform with better tech to find product-market fit to attract thousands of non-crypto developers?
4. Are the applications built on Ethereum really that “useful”?
- The most prominently cited use case, #DeFi, is solely used by crypto natives for leverage and speculation.
5. Let’s say speculation is the killer application:
- Is it a large enough market to justify existing network valuations?
- Will speculation continue if no other useful applications are built?
Funnily enough, we’re still so early in the game that we can’t even agree just how early we are.
Is the disillusionment many feel similar to that of the Dot.com bubble bursting in early 2000? Have we even neared 1995 and our “Netscape moment?” Or is it possible that we’re still stuck in the ’80s when the infrastructure of the Internet was too immature to support more than hobbyists?
We still have much to do including solving scalability, distributed data storage, decentralized price oracles, and creating comparable UX/UI to existing web apps. I’m hopeful that this will happen, but like others, not sure on the timeline.
Nic Carter dropped this must read beauty on Bitcoin as a peaceful revolution. I’d be intimidated to challenge Nic on anything related to Bitcoin and crypto, but this statement had me thinking about the value proposition of Bitcoin, “Capped supply is not a feature of Bitcoin; the supply cap IS Bitcoin.” If the supply cap is Bitcoin, then we need to really question the power of supply caps and a network’s ability to maintain one. This well written piece by Arthur Breitman evaluates the benefits and drawbacks of supply caps. As always, I’m not sure where I land on this, so I guess I’ll just have to cryogenically freeze myself until May 7th, 2140 to find out.
If you’ve been reading along, you know that I’m optimistic yet skeptical of the DeFi narrative. Last week, I wrote about the dark side of composability. This week Greg Rocco of Alpine noted that for most existing applications, DeFi is a misnomer. This built upon Ameen Soleimani’s deep dive into Compound, which made it clear that in its current state, Compound is a custodial system with central points of failure.
In spite of its issues, which I only highlight so that participants don’t take unnecessary risks, DeFi is an exciting landscape for experimentation. Case in point, Dan Robinson released a whitepaper for yTokens, creating a DeFi protocol for fixed term, zero coupon, secure lending.
Hashgraph is launching this month. No smart contract platform launch would be complete without “FUD,” but this one takes the cake. Not only is there counter FUD, but even more counter-counter FUD. Since their last round was held at a $6B valuation at the peak of the bull cycle, I expect the HBAR token price to decline steadily (and possibly steeply) post-launch.
Since another “ETH Killer,” Algorand, botched its launch, Union Square Ventures has submitted a proposal to lengthen the vesting period for all ALGO holders. USV proposed that the foundation should introduce an on-chain voting mechanism, so that node runners can approve the proposal.
Inspired by Relaynode NYC creator, David Gogel, I’m going to share new job listings for Los Angeles’ leading crypto companies.
Spring Labs — Senior Manager Product Strategy (Full Time)
Ikigai — Analyst (Part Time)
WAX — Senior UX Designer (Full Time)
This Week
CryptoMondays LA(Free)
When: Monday, September 9th, 6–9P
Where: Upstairs Space 1212 Restaurant on 3rd Street Promenade in Santa Monica
Crypto 101 ($25 or Free for Crypto Blockchain Plug Members)
When: Wed, September 11th, 7–9P
Where: Crypto Blockchain Plug 614 East Manchester Boulevard Inglewood, CA 90301
A beginner’s course for individuals interested in entering the crypto space
Steve Myers and Bitcoin (BTC) Socratic Seminar #2 (Free)
When: Wednesday, September 11, 2019, 6–8P
Where: WeWork Fine Arts Building, 811 W 7th St · Los Angeles, CA
Inspired by Bitdevs NY, this is an event for those interested in discussing & participating in the research and development of Bitcoin and related protocols. The Socratic Seminar events are formatted to foster debate, information sharing, and lively discussion..
Steve Myers is co-founder of Bytabit AB and a senior software engineer at Disney Studios.
Upcoming
Morality in Tech Panel ($36 *10% of proceeds to the Jewish Federation*)
When: Thursday, September 19, 6:30–9P
Where: Lois Lambert Gallery, 2525 Michigan Ave. E3, Santa Monica, CA 90404
I’ll be speaking on this panel for what I hope will be a lively discussion around values-driven technology. Joining me on the panel will be Janice Taylor CEO of Mazu and Dr. Jessica Carbino, the former Sociologist for both Tinder & Bumble.
LA FinTech Mix & Mingle ($11–22)
When: Tuesday, September 17, 2019, 7–9P
Where: Cross Campus Santa Monica, 929 Colorado Ave, Santa Monica, CA 90401
Regular LA FinTech meetup including a demo by Julian Kopald who will introduce Prodoge a P2P crypto invoicing, point of sale, and marketplace platform. He will also discuss the future of Doge Cash and Dogecoin.
LA’s Inaugural Decred Meetup hosted by Blockhead Capital (Free)
When: Thursday, September 26, 2019, 6–9P
Where: Cross Campus Santa Monica, 929 Colorado Ave, Santa Monica, CA 90401
Decred technical and governance overview plus special keynote from Jake Yocom-Piatt of Company Zero and Project Lead @ Decred.
BlocktoberFest (LA Blockchain Week Kick Off Event) (Free)
When: Sunday, October 13, 2019, 4–10P
Where: Boomtown Brewery, 700 Jackson Street Los Angeles, CA 90012
Kick off event for LA Blockchain Week — RSVPs limited, so recommended to sign up early
Notable Conferences
September 8–15 — Tel-Aviv Blockchain Week (Tel-Aviv)
September 10–11 — DeFi Summit (London)
September 11–12 — Consensus Asia 2019 (Singapore)
September 11–12 — Scaling Bitcoin (BTC) (Tel Aviv)
September 14–15 — Baltic Honeybadger (Riga, Latia) 2019
September 16–18 — Shanghai Blockchain Week & 5th Global Blockchain Summit (Shanghai)
September 23–25 — CryptoSprings (Palm Springs)
Sep 30-Oct 1 — Korea Blockchain Week (Seoul)
October 5–6 — Cryptoeconomic Systems (Boston)
October 8–11 — Devcon 5 (Osaka, Japan)
October 8–10 — World Digital Mining Summit (Germany)
October 15–16 — Crypto Invest Summit (Los Angeles)
October 19–20 — The Lightning Conference (Berlin)
October 21–23 — ACM: Advances in Financial Technologies (Zurich)
October 23–24 — CordaCon (London)
Oct 28 — Nov 3 — SF Blockchain Week (San Francisco)
November 4th-5th — Stellar Meridian (Mexico)
November 12th-13th — Capital: Global Coinmarketcap Conference (Singapore)
Nothing written in RelayNode LA is legal or investment advice and should not be taken as such. RelayNode LA does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.
Published at Mon, 09 Sep 2019 07:20:18 +0000
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