Stop building on the blockchain
This is an open letter to all my fellow software developers, indie hackers and entrepreneurs: Stop building things on blockchain technologies.
This is a complex topic, and I will only touch on a few topics. If you remember one thing, let it be this: The growing popularity of cryptocurrencies makes the rich richer, promotes ultra-libertarian views and enables scams and ransomware. It does not lead to decentralization and empowerment of the little man.
By building on the blockchain, you are not a revolutionary for a better, more equitable world. You are merely a pawn in this selfish game of chess of the rich.
Why does it make the rich richer?
Cryptos are increasingly used by venture capitalists to create returns quicker than ever before. Simply said, they invest in new crypto startups that then list their crypto on a “reputable” exchange like Coinbase (which is of course also owned by VCs). Then, they create demand for the crypto and sell their initial holdings extremely high. After a while, the gullible fools who thought they are going to the moon realize that they were left holding the bag.
There is an interesting analysis by Fais Kahn where he looks at the data and concludes exactly this.
By building and promoting blockchain, you become part of this hype cycle. Even if you personally don’t pump and dump or have bad intentions, every bit of activity in this space ultimately benefits the Mr. Andreessen and his buddies.
Why blockchain doesn’t lead to decentralization
Decentralization is just a pipe dream sold to you by institutions trying to enrich themselves. Blockchain does not lead to decentralization. It's obvious if you look at major cryptos: a small number of people hold a large amount of the crypto wealth, and a few mining pools control the majority of the mining activity.
Why is this happening? The answer is economies of scale. Nvidia lead engineer David Rosenthal makes this point in his 2014 blog post Economies of Scale in Peer-to-Peer Networks. If you have some time, go have a read. But the main point is this (quote):
Since then I've become convinced that this problem is indeed fundamental. The simplistic version of the problem is this:
- The income to a participant in a P2P network of this kind should be linear in their contribution of resources to the network.
- The costs a participant incurs by contributing resources to the network will be less than linear in their resource contribution, because of the economies of scale.
- Thus the proportional profit margin a participant obtains will increase with increasing resource contribution.
- Thus the effects described in Brian Arthur's Increasing Returns and Path Dependence in the Economy will apply, and the network will be dominated by a few, perhaps just one, large participant.
And this is the same exact principle that applies to blockchain, too. Not only to blockchain, by the way. The internet is built on decentralized protocols like SMTP and HTTP. However, most people use Gmail for their email and most web services are hosted on AWS, Microsoft Azure or Google Cloud.
But don't we need all this experimentation to find a game-changing use case for blockchain?
There will be no real use cases for blockchain. It’s true that it sometimes take a while until interesting use cases emerge for new technologies. But, this technology has been around as long as the iPhone, and look at the use cases that emerged for the iPhone. In fact, the iPhone (like the internet) had real use cases from the get go. Technologies may not be widespread or cost-effective at the beginning, but if it's a good technology, it already provides a real value add to a small group of people in its early days.
Conclusion
All that blockchain is, is an intriguing intellectual exercise, that proved to be not viable in the real world. It does not solve the trust problem in a practical way.
All projects and apps that build on blockchains, be it DeFi or NFT, keep promoting cryptocurrencies, making the initial creators richer and the people that "get in" later are left holding the bag.
I'll say it again to make it stick: By building and promoting apps and projects based on the blockchain, you become a pawn in this selfish game of chess of the rich. I’m not denying that there might be a few blockchain projects that do real good with the money raised, but they are the absolute minority and do so by promoting an incredibly destructive technology. The end does not justify the means.
My plea is: Don’t do it. Don’t be tempted by the devil to join this get-rich-quick scheme. Go back to building products and services that are not zero-sum games but add real value to the lives of people without fucking everything else up.
Recommended further reading:
This is a really biased take, and borderline conspiratorial.
Are VC's investing in crypto? Yep. Are they also investing in every single other technology company being made? Yep.
Okay, so let's look at decentralization. When you say decentralization is just a pipe dream, you need to scope decentralization. At present Ethereum is far more decentralized than, say, GoFundMe, which just shut down donations to a cause because they disagreed with it. Decentralization is a sliding scale, not a place you arrive at. Companies like Patreon shut down donations to Ukraine while they raise tens of millions in donations via crypto.
As far as "real" use cases go, there are many.
The list of uses goes on. You can say it's all just a scam, but that's not what the market, or operators in the market, think. And if you look back, this is essentially the arguments people would make about the early internet. Scams everywhere, investors get huge chunks of companies building in the space, etc.
Of course I'm biased, but everyone is biased. I wouldn't go as far as saying that it's conspirational, though.
Let me try to address your points:
Of course. But it's also clear that they can create liquidity much faster as described in the article by Fais Khan that I linked.
The trucker protests were declared illegal by the Canadian government, and companies need to comply with local law. Crypto companies are evading laws and regulations today, but this will change in the near future and then we're back at square one. I think you confuse "decentralization" with "evading regulation" in your example.
I never said that it's all a scam. I said it enables scam.
Please stop with this early internet argument. The internet, and the ARPANET before it, provided real value to people (academics, computer scientists, military) since day one. It for sure wasn't enabling financial scam on the level that crypto does.
The things you list go from terrible (nobody wants their medical records on an immutable blockchain) to not solving a real problem better than non-blockchain databases (proof of title, proof of identity, social media).
The reality is, blockchain is a database technology that is supposed to solve the trust problem in theory, but can't do it well in practice. It's worse and more expensive technology than existing database technologies.
@canolcer if you're not willing to take the flack by calling crypto a large scam, I will.
People targeting web3 and crypto in general, from what I have seen seem to be interested in the quick buck. Their imagination has been captured by people selling crappy NFTs for a large sum.
How many technologies have you seen that enable you to make a shit ton of money with as little effort? Personally? No other one.
And for anyone saying that Bitcoin (and crypto) is not a scam I'd like you to take a good read at this article:
https://jacobinmag.com/2022/01/cryptocurrency-scam-blockchain-bitcoin-economy-decentralization.
I'm willing to be proven wrong. Tell me this article is wrong. But most importantly tell me why it is. Because to me it feels like it is on point.
This comment has been voted down. Click to show.
DHH has done some amazing work with Rails and I love using Rails (I'm also a Basecamp user and Hey customer). But that doesn't mean he's right on everything. This is a cognitive bias called halo effect.
People always mention all these use-cases for Blockchain, but always fail to mention WHy blockchain instead of traditional technologies?
Yeah, blockchain is precisely where someone would want to host terabytes of data.
Why does it need to be on the blockchain?
An immutable system that is public by default isn't really where I'd like to store my health records.
Again, why blockchain?
This comment has been voted down. Click to show.
It's the other way around. Technically savvy and informed people know the fundamental flaws of blockchain technology. For that simple reason, we can confidently say that it's bullshit.
I'm puzzled that you're puzzled
...and to explain, in my opinion, why technically-savvy and informed people dont grasp the the concept is because of such replies — no substance, just more buzzwords and future promises!
I am yet to see one concrete/convincing example, that actually implements something without promises or gives a full practical use case that we can start using today!
Cryptos and blockchains have existed for a good amout of time now, and at most the best explanations I've seen so far center around "in the future we will be able to... etc etc"
As @FarouqAldori mentioned, I'd like to see more whys, hows and actually implementations.
I'd love to be wrong because that's how I learn, but as of now, most of the things I've seen crypto/blockchain do is scam people!
Please, do tag or message me when you write your post on crypto.
Remember you can always listen in on the big game on radio
Remember you can always go to the game live
Remember you can always go to the theater
Remember you can always go to the pub and share your opinions with strangers
Remember that you can always find information in an Encyclopedia
Remember that you can always end Mails
Remember that you can always do a lot more other things
Remember that you can always buy a regular Toyota corolla
Remember that you can always use Google analytics, why use that open source software
And the last thing is why does it need to be open source?
I'm not saying blockchain should be used in every field neither am i saying it is perfect but leave your world for a second and zoom out with a non critical mind but an open mind.
Technology just makes what we do easier.
Nothing is inherently decentralized. Read this:https://moxie.org/2022/01/07/web3-first-impressions.html
The front-end is the issue.
Also in the real world - if you send a transaction and you made a mistake. There is no customer support line for Bitcoin. But thats how 99% of the population operates.
I am not dunking on it, there are some great use-cases like DeFi but generally speaking. Web3 is a fundraising mechanism, not a functional one.
The issue with decentralization does not only concern the front-end, it concerns eveything: the backend (or are you going to download terrabytes of data to your Macbook Air every time you want to interact with blockchains?), the mining (only a few miners control the majority of new transactions), the exchanges and so on.
Fair point, would love to see more data on this.
Also from commercial perspective token holders are also majority VCs who invest, usually 1/3 belongs to them.
Thanks for saying all that.
It's exactly what I feel for a long time.
This is a really interesting point, but has a few shortcomings.
Firstly, it appears to be aimed at crypto-anarchists, who want to give big institutions a black-eye whilst sticking up for the little guy. This view is not representative of all Web3 participants, many of whom welcome VC money as indicative of mainstream adoption of innovative new technologies.
Secondly, VCs are always going to be funding innovative technologies, across all sectors. In fact, their funding is welcome, as it allows new technologies to scale and evolve quickly.
Coinbase might be funded by venture capital, but VCs attempt to get cryptos to list there because they know that that's where the BUYERS of crypto hang out. It is a key marketing channel.
VC money has put Coinbase in this dominant position, but your post seems to suggests that all VCs are somehow in cahoots, which is clearly not true.
Finally, you seem to miss the benefit of building on the blockchain. There are clearly advantages to decentralisation (as noted in other comments), but only for certain businesses. At the risk of using the 'it's early days still' refrain, it really is early days.
Fair point. I know that there are people that don't pretend to give two shits about the ideology if cryptos, but most people believe that using a decentralized and permissionless database technology will lead to less concentration of control. All I'm saying is that this is an illusion, because economies of scale will still drive centralization. This is not a technology problem, it's a fundamental economics principle.
Yes, but it's also true that they can extract liquidity much quicker and with less risk than investing in a traditional SaaS. You can't just hand wave this away.
Ok, I'll bite: After how many years am I allowed to say that it's not the early days anymore? It has been 13 years, I think the grace period is over.
Interesting write up. Thanks for posting.
I have a few blockchain-related items on my list of ideas to build, but I feel like they are mostly get rich quick schemes and don't provide a lot of value compared to other ideas on my list.
lets try to build them, willing to help.
Great read and nice to see "a different take" on the blockchain circus instead of "jump in" and "this is what you should be working on". 🙌🏻
Well said, I totally agree with you.
OK, so I thought something like this until I really bothered to learn about the technology in depth.
Does it make the rich richer. Yes of course it does. However the current structure of the internet is worse. The internet as it stands destroys geography and makes every market where it can operate a winner takes all global market. The VC strategy you describe is exactly what caused the dotcom boom.
Your expectation seems to be that the decentralisation of crypto is total. It's not total, it doesn't need to be. The point of it is to have enough participants in a system of trust that it becomes too expensive to be a defector. Unless you work very hard, power will still tend to concentrate but it will have an upper limit, or the system fails. Literally to the extent that someone runs off with all the money in it.
Crypto is indeed the wild west right now. It's not safe to put any money in it you can't lose, and you should spend time understanding what not to do first. But you have to consider, it's an entirely new economic system. It's taken literally centuries for the existing one to evolve to where it is now and it used to be like Crypto. However regulation is starting to enter the space. Some bad and crazy things happen right now, but they will come under control when this happens.
The dumbest comment people make about crypto is that it doesn't have a game-changing use case yet. It does, it's called electronic programmable money with minute transaction fees. Blah blah Ethereum - Ethereum has technical problems right now, other newer chains can do transactions fast for about $0.001 without Bitcoin's horrendous electricity consumption. It is game changing, it currently has total market cap of $2 trillion. That will overtake Apple's market cap pretty soon. There are a host of really interesting ideas. E.g. Crypto is the ideal tech to finally create micropayments on the web which will end the business model of dodgy ads and selling your data. But they are too early. And I'm not interested in your 'it hasn't changed the world yet, I'm waiting....' Because if you research you'll see there are even advances in fundamental cryptography theory being driven here which haven't had time to find applications yet.
Where there is an issue with use cases is that Crypto seems to generate a huge amount of creativity within its own space, but much less which interfaces with the non-Crypto world. This is partly because the capital pouring into it means you make more money doing Crypto in a Crypto context. It's also partly because of the unwillingness of people holding Crypto to turn it into fiat because again the capital pouring in means you can get 10-15% interest just staking it in a PoS chain on top of the increasing demand for the main coins causing them to continue to appreciate. And there's an element of regulation. Are you breaking the law in terms of tax etc when you get your money out as fiat? That's not clear enough yet. Is it money laundering? Crypto attracts criminal activity as an unregulated space but there are 230 million people holding crypto and most of them are not criminals. But the Crypto bubble is starting to break out more.
Even if you disagree with all this, it's clear that crypto is massive and is going to get a lot bigger. It will change a lot of things. Why not get involved and push it in a positive direction. Actually when you meet people in this space, particularly in the space of DAOs (which is really interesting and will have some very positive benefits) you find smart idealistic people who see the status quo changing and want to do exactly that.
First of all, hats off to you for posting what is going to be a VERY hotly debated opinion.
One thing that's always interested me is the comparisons between blockchain and AI. Lots of people felt that blockchain was going to enable new business value in the same way that AI has.
I've spoken with a number of people who are really into blockchain, crypto, and defi technology, all of whom are definitely way smarter than me, to try to understand why they feel that way... but I'm still not convinced that blockchain will ever become the game-changing technology that AI has been.
AI allows us to do fundamentally new things with computers that we couldn't do before. That's the key difference. Compared to that, blockchain allows us to do things that we could already do, but without a central authority.
While there are certainly places where decentralization matters, it's not going to universally transform business across all markets in the way that AI has.
We haven't done ANY blockchain opportunities over at Software Ideas for mostly this reason. I'm sure any blockchain ideas we could write would be extremely popular, but they're hard to find using our research model.
There just aren't too many markets out there for bootstrappers where the central authority is the main pain point for customers.
This 100%
The comparison to AI is interesting. I would say that AI was (and still is) extremely overhyped. And there are also companies who "scammed" investors by saying that they want to build game-changing AI, knowing full well that it's not possible. But they are few and inbetween.
If we look at a subset of AI, machine learning, we can see that there are real world uses that add great value to people and businesses. For example, I love using LanguageTool (open-source alternative to Grammarly) to improve my writing. That wouldn't be possible without machine learning. Another one is finding pictures quickly on my phone of my cat. I could go on.
However, for crypto, there are no such use cases (except gambling / speculating of course).
Finally, I think overhyping AI does far less damage than overhyping crypto, because 1) it doesn't fuck up the environment and 2) doesn't enable nearly as much scam and fraud as crypto does
I definitely agree that individual companies often try to overhype their products by claiming they "use AI," when in reality they are trying to include it as a buzzword and their product only uses AI for a very small feature. Like you said, machine learning and deep learning models are where the real business value can be generated from AI, and I think that's where the hype is the most valid!
blockchain is the future
What's wrong with rich people getting richer?
Even if we assume it's bad, there's no way to prevent it. Being rich means having more money. Having more money is advantageous, otherwise money would be useless. Having advantages makes it easier to make money. You can buy better tools, afford better education, hire people, invest in more opportunities, etc.
Not only is this unstoppable, but again, this is the entire point of money: to give you more advantages if you have more of it.
If you want to avoid helping rich people get richer, you'd have to avoid participating in the entire global economy. Don't buy things from Amazon, because you're enriching Bezos, his execs, and their investors. Don't use Google, or DuckDuckGo for that matter. Don't buy a Mac, or a PC. Stop flying, stop buying cars, stop taking ride shares. Get rid of your smart phone and don't buy a flip phone, either. Hell, stop paying taxes, because the government uses tax revenue to buy services from companies run by rich people.
"Sticking it to the man" isn't really feasible. And even if it was, it's not actually good.
Seriously. How exactly would stopping the rich from getting richer help anyone? Wealth is not a zero-sum game. When Facebook stock does poorly and Zuck loses billions, it's not like the world's poor gain billions as a result. That's not how it works.
In fact, quite the opposite. Wealth is frequently accumulated as a result of technological innovations which tend to spread far-and-wide and improve life for humanity as a whole. Billions of people have cell phones, the internet, running water, time-saving appliances, life-saving medicine, durable clothing and shelter, and an unlimited plethora of entertainment options available at our fingertips, at unimaginably low prices, as a side effect of individuals pursuing wealth.
Discouraging innovation and wealth accumulation helps nobody. If we want to help people, we should help people. Not try to hurt other people.
I agree with you in that there's nothing wrong with the rich providing value and as a result getting richer. I think that was a poorly phrased attempt at dispelling the idea that crypto is inherently more equal in its distribution than regular capital.
To clarify, if crypto were any economic body, it would have the most unequal distribution of wealth in the world, including in aristocracies, with 2% owning 95% of the supply of crypto. This also applies to mining where 0.1% account for about half of all mining operations.
I disagree with the philosophical point that we should help people at a detriment to ourselves, especially when the group receiving the help doesn't need it because they are already in a privileged position. I believe you should create the world you want to live in.
If someone were to choose to live in a world where there is no rich by actively supporting companies that were in worse positions I believe it is that person's prerogative.
I also think the world is too complex to be able to say "sticking it to the man's not actually good". The poor could be benefited in a plethora of other ways. Let's say there are no rich people, the world's total envy probably dropped by a significant amount which makes the world a better place.
Hey Courtland, as @HermanMartinus replied in the sister comment I think I didn't get my point across correctly.
There's nothing wrong with people getting richer (at least, until a certain limit, but that's another discussion). Many proponents of crypto preach that crypto will lead to a more equitable future, a future where there's less concentration of power. My point is, that this is not going to happen as we can see now. So, why go through all the scams and environment-burning if it will lead to the same system that we have today?
Well, I actually do want to build on blockchains because I see it as the future in many categories. I don't care who put money into this and what kind of devil is behind it, but I listen to myself. I understand the concept and love it. I hope we all soon will log in to many web2 platforms using our wallets.
You cannot decentralize money.
It is foundational to our social contract and backed and enforced by governments ... a collective social contract.
Money is only as good as ... many things, including your ability to access and make purchases.
In Canada, Russia, and Venenizalia ... the government can control all access.
I $1MM in crypto does not help you buy food if you cannot use it where you are.
Crypto is a Ponzi scheme.
To be honest I really don't like this anti-crypto mentality. If you don't like crypto, ignore it.
I spend less time on Hacker News because all this crypto negativity. Please don't start here too.
There are plenty of cool things in crypto and web3. I was hoping this is a positive community that wants to get things done, not a negative community that search for how things can fail.
Telling people what not to work on is really not what I'm searching for in an entrepreneur community.
If crypto wouldn't fuck up the environment, enable scamming gullible people and make possible ransomware I wouldn't give a shit. But it does, and the end doesn't justify the means. That's why I'm speaking up.
Anytime someone says crypto fucks up the environment you probably haven't really taken a good look at crypto
Tezos is very much environmental friendly, and also ETH is moving to PoS which will make it environmental friendly
Email enables scamming gullible people, every single platform does, should we stop using the platforms?
Ransomware has existed for ages does that mean we stop using the internet?
Come on
I'm really tired of these kinds of discussions, but here we go:
Proof of Stake crypto's doesn't fuck up the environment.
Scamming happens everywhere, from religions to health pseudoscience. Nothing to do with crypto.
Ransomware predates cryptocurrency.
In the end, anti-crypto is a religion on its own, and I'm not going to discuss which god is better.
Fair enough. If the majority of transactions switched over to PoS I would have one fewer problem with crypto. But I don't see that happening.
Sure, but it happens overproportionally in crypto (because it's easier to do).
It does. But virtually all ransomware use crypto today and requesting ransom is much easier and less dangerous for criminals because of crypto.
Again - if this all had some amazing upside like curing cancer, I would probably welcome it. But so far I have seen nothing, and after 13 years all I keep hearing is "it's the early days" and getting shown clips of Bill Gates on a talk show.
Fortunately real change is affected by those who posses the imagination to envision it. Without such people, we'd still be riding horses since, well, they do a fine job at moving us around and they don't require gasoline....
And that's not accounting for the fact that we know with hindsight that cars worked out. Whereas with the state of crypto (13 years in and nothing but the ability to speculate and potentially get around some regulations that have yet to be patched) it's not looking as hopeful.
Heh, this is a great analogy. Imagine if the first cars couldn't move at all, or provide any value whatsoever, but there were millions of people walking around telling everyone else about how they should buy chuck-e-cheese tokens so that someday cars would work :D
Love it :D
@canolcer Thank you for speaking up, we really need people like you.
This is the biggest tech scam of our times.
Thanks @prakis
I'll just leave this here: https://web3isgoinggreat.com/
She has a great Stanford talk about web3 that she published recently.
valid points but crypto & blockchain is a great enabler.
Whether one gets wealthy or not is beside the point.
The degree of decentralization is mostly still a farce but the longer this thing stays alive - the better are the chances of the movement's ideals to be reached.
Y-combinator often uses the term SISP (solution in search of a problem). I think a lot of these new crypto startups are SISP companies.
When I saw the title of the post, I thought Ok, let’s discuss how startups should not use what is basically a-slow-linked-list DB for their projects, just because they could say
So here, I'll focus on that part. And Bitcoin.
Most of the time the reason for mentioning Blockchain was to create hype or get investment. But it just made little sense. If you want to create a useful product, the storage system you choose should be the best one for the task at hand, not what is the most popular at the moment. To be clear, that goes for all other technologies that you are using in a startup. Remember that technology is just a tool for something greater than the technology itself: solving the problem users have.
To return to the blockchain and crypto. As noted, not that the technologies are bad. They are just used and applied where they should not be used or applied. Let’s look at the origins of the blockchain: it helped solve the Double spending problem other cryptocurrencies had since the 80s when they were first introduced. In short, if I give you an apple in the real world, you have an apple; I don’t have one. But, if I send you an image via the Internet, you have an image, and I have an image. That is ok with images, I guess, but it is a problem with money - if you send me some digital currency and get something in return, I (society, everyone) don’t like the idea of you still having that money.
And that is where Blockchain fits perfectly: it solves the Double spending problem elegantly, making it a perfect use case for Bitcoin. Once paid with Bitcoins, the transaction is written into a publicly accessible, immutable ledger, where others confirm you don’t have those Bitcoins anymore. That is the essence - technology used where it should be used, and where it really makes a difference. Also, by creating a public Blockchain, everyone can be sure that there is no Double spending, while still keeping transactions (semi) private. Win-win.
But, after a couple of years, things went wild. It became popular, Bitcoin’s price rose in 2017 to an all-time high, and the founders, startup owners rushed to either implement or switch to the new shiny technology, gaining nothing except for buzzwords that stood proudly on emerging Single page applications.
Not to mention the rise of cryptocurrencies that soon followed. We all remember that. I was there, in the middle of it. The startup I joined in March 2017 got 10000 Bitcoins by June, after a successful ICO. Those 10K Bitcoins turned to $170M at the end of the year, in December. Not to mention other coins, and that the total value of resources at one point exceeds a quarter of a billion. Mein Gott, that was a lot. We were sent to create software and support products built on the Blockchain.
We failed.
To be honest, even if we had $2.5B on our account, we would fail. Reasons for that go beyond Blockchain or technology. But that is for another story.
To summarize:
~ Don’t indulge in l’art pour l’art when choosing a technology - use something that best fits the general software architecture of your product, and of course, the user’s needs. That should be your priority.
~ For the love of God, if you are going to use Blockchain, don’t use the private one. There are 99% chances that you don’t need it. If you need immutability, you will almost certainly be better off with Kafka or ImmuDB (I have not used the latter, but heard some good words). If you are worried about replication and not losing your data, go with Cassandra, Mongo, CouchDB, or others. Almost all DB nowadays offers some replication mechanisms. Hell, create a file for each user and store it on the Desktop. You will be better off than creating a private Blockchain.
~ Bitcoin in itself is not a scam, nor is it going to fall flat. It was built using math, and math (generally) can't break. What is problematic here is its price, which is highly volatile and susceptible to speculation. In some terms, it is like every speculation since we invented banks. But, as long as there is one PC mining in the world, it will be here.
~ Think twice before going into the Blockchain, and then think again.
I'd totally second this, make sure what you're doing has real value. It's too easy to do that right now as people are throwing money at everything in the space, like in the dotcom boom. You have to spend a while understanding what blockchain is really for. It is totally unique and will have way more applications than anyone has thought of yet, but it's not a database.
Interesting thread that i love and respect but this sees like its is coming from someone who hates blockchain than someone who is critical of the tech (check @nscalf comment)
Blockchain is promoting scams
Give me one industry that doesn't have scams? Email scams exists, stop building email marketing tools? definitely not.
Yes i agree the moon boys are pumping crypto and promoting scams but doesn't mean the industry is a scam
Blockchain makes the rich get richer
The internet makes the rich get richer, we had a ton of millionaires in the early days of the internet and VCs were there investing and making billions but from that crop of the Rich getting richer we created the most successful crop of self made millionaires, and its cause the rich were getting richer they invested more into the internet and we are here today talking about blockchain
If everyone listened to the nay Sayers saying the internet was useless then we wouldn't have IH would we?
Who made the most money off the internet? the ones who got in early the richest men in the world today are? those who got in early
There's no single industry that doesn't reward early adopters.
The late comers are left holding the bags
You hold the worthless bag when you put in money in squid Game coin. Think about it like investing in companies, will you throw money into a new startup with a shady name and marketing ? no
A good look at ETH would show you how its a platform, why do you hold Microsoft stock? cause you know more products will be developed on the Microsoft.
Remember the internet dummies celebrated that a game will be broadcasted on broadcast.com, which a radio could already do.
Why Blockchain?
Why open source?
With all said Blockchain is faaaaaaaar from perfect and is not ready for mass adoption but zoom out, look at it from the least biased view imaginable.
Seeing the heading of this article, I figured "yeah, let's have a discussion on the merit of crypto, DeFi and Web3". Always love those discussions.
However, after arriving at "every bit of activity in this space ultimately benefits the Mr. Andreessen and his buddies", I realized a reasonable, balanced discussion is not going to happen.
But please explain me this though; how is me working with the Ethereum Foundation on a website that explains the concept of "sound money" to those interested in the subject line the pockets of those terrible VC's? Just curious.
Not justifying the words he used, but I might have used similar words if I ever had to write a post on crypto too, given the current state of affairs!
Even when I try to be open minded and find more info about practical uses of crypto, the negatives outweigh the positives tenfold!
So yea, its easy to get frustrated!
I'll give you one.
It was next to impossible for my family office to get a broker account to trade off-shore stocks and ETF's (mainly on the US markets). They simply wouldn't open an account, or the amount of paperwork would be so staggering it would take me weeks to get all it together.
So, I went a different route. I started used DeFi platforms (Mirror and Synthetix) to invest instead. Zero paperwork, zero questions. Tada... use case.
Could this be done by existing solutions, ie TradFi? Well yes, in theory. However, real life tells us something different. I was not able to get where I needed to go using TradFi. Even though our family office is 100% legit, above board, etc.
Traditional finance is a crap fest, plain and simple. It's broken in so many ways, I wouldn't even know where to start. Crypto and DeFi might (!) fix this. It certainly is fixing parts of it, for me, right now.
I think what is broken is the regulations, not the technology.
And the fact that Crypto solved this for you is not because of Blockchain technology, but because it bypasses regulations.
Semantics.
It's the system that's broken. And the tech is a part of that system.
It's the underlying tech, within the blockchain industry, that will massively influence the regulatory framework that will evolve around it.
DeFi bypasses the current regulations, only because it's made possible by the technology. If this new ecosystem would be centralized, it would face the same fate as the TradFi world.
So yeah, the tech does kind of fixes that. Obviously, there will be regulations, and there should be. But they will look very different from we have in the conventional financial systems.
I agree with you that the technology is forcing the regulator to find new ways to regulate. But eventually it's a matter of time till it will also be broken in the same manner, unless the regulator get some sense and try to make things simpler.
Too bad for all of us that such an inefficient technology (crypto mining) had to be used in order to move the needle with regulations.
And that is not justifying most of the other use cases for Blockchain that have nothing to do with regulations.
Clearly, I'm using hyperbole to emphasize a point here. Not literally every single activity makes specifically Mr. Andreessen richer. The point is, adding to the crypto hype by actively working on it ultimately drives up the price, which enables a lot of scammers such as a16z (only taking them as an example because they promote crypto like it's the cure to fucking cancer).
You can call it hyperbole all you want. To me, as a reader, it comes across as a sweeping generalization which leaves very little room for a healthy, nuanced discussion on the subject. How am I to guess where your "hyperbole" ends and your actual knowledge, understanding and opinions on the industry start.
And the second part of your reply, kinda destroys your hyperbole claim, as you're essentially iterating the same statement; all work done in this space is contributing to lining the pockets of a select group of people.
I'll give you another example to illustrate to silly such generalizations are: I am working on a project where we built a UI allowing users to more efficiently interact with certain Yearn Vaults (using to automated yield farming for stable coins). Using these vaults, does literally zero to increase the price/valuation of any token or asset. It simply allows users to earn a yield on their Euros or USD (which tradfi banks can no longer provide). There is zero hype here; just simple folks earning 8/9% yield on their savings. Would love to hear your take on how this work is "driving up crypto prices, enabling scammers like a16z".
I mean dude, you surely must have looked into a16z's portfolio before writing this piece, no? You do realize it's not a crypto exclusive VC right? You understand they have invested in companies like Facebook, AirBnB, DigitalOcean, Slack, Github and Skype (just to name a few). You understand the business that VC's are in, no? It's to make money for their LP's. If they don't, they'd suck as a VC. So obviously they'll be riding the crypto wave, as every other VC presented with the possibility would and should.
BrainTrust is an excellent example of how decentralization empowers the little man. Look at the other freelance networks, UpWork and Fiver for example. These networks charge the freelancer up to 20% and possibly more. That money does not go back to the freelance community, it goes to the private companies whose incentives are not aligned. BrainTrust is governed by the freelance community. You are not going to find a better solution for this model than what web3 provides. Shameless plug to use my BrainTrust affiliate link for those interested in being a freelancer on BrainTrust.
Just a tip: Plugging your affiliate link after making an argument weakens your argument :-)
Futhermore, "nobody" is using BrainTrust, but millions of peole are using UpWork and co. Do you think the makers of BrainTrust just volunteer their time? No, BrainTrust, like all other for-profit companies, is incentivized to maximize their profit. There's no reason that BrainTrust should take less fees in the long run than other players in this market. They should probably take more, because an app on the blockchain is more expensive to run.
If you want to build a freelancer platform that truly only cares about the freelancers, go make a non-profit organization. Finance yourself with donations, and do make any profits. For that, you don't need blockchain.
Of course it’s not as large as UpWork because BrainTrust only selects top talent to be in the talent pool. Not only that but you must first contribute to the network to even be considered. So the talent is good and has skin in the game.
You should do your research because The BrainTrust Foundation is a non-profit. Not only is it a non-profit but they also do profit sharing. Please try and come with an example that is even close to this model for a freelance network.
Since they are a non-profit they can’t.
That’s exactly what they’ve done.
I’m a member of the network and believe in the product, of course I’m going to plug it 😀
Well, the foundation (Braintrust Technology Foundation) which releases the token seems to be a non-profit foundation. Freelance Labs, Inc., which is the company running the BrainTrust platform, doesn't seem to be a non-proift (they are an "Inc.").
If the founders really wanted to help freelancers, they wouldn't need the blockchains and tokens. Who do you think holds the biggest amount of tokens, and will profit most if the value of these tokens go up? Freelance Labs, Inc.
Furthermore, they still take a 10% fee. Do you really think they won't increase the fees once the platform becomes more popular?
This is exactly the kind of scamminess I'm talking about in everything that touches crypto. There's always this front of building a community and doing something good for the small man. But in the end, it becomes clear that whoever issues the tokens has a vested interest that the demand for this token increases, and this creates all kinds of conflicts of interest.
PS: I'm not saying that BrainTrust is an outright scam, but they are not being transparent (e.g. how much of the issued tokens do they own now and in the future?).
I don't know enough about the crypto business structure to comment why there is the foundation and why there is the Inc. But I do know taxes for crypto businesses is complicated and that it's easier for incorporated companies for some reason or another.
You very well may be right that Freelance Labs holds a significant amount of BTRST. This can probably be figured out.
They take 10% from the client, not the talent. They take nothing from the talent. This is a BIG difference from UpWork and the like who take up to 20% off the top from the talent. Not only do they take nothing from the talent but they distribute the BTRST back to the talent.
You can find out a lot more about these details here
Sure it's a big difference. I guess my main points are 1) they could do this also without pumping their own crypto and 2) if they grow, their cost and pricing structure will start to become similar to that of big players in this industry. It's not like they are doing anything revolutionary which would lead to significantly less costs for them.
The pumping as you call it is the fuel for the machine. Sure the owners profit when the value of BTRST goes up but so does the network. Time will tell how the organization changes with growth.
This comment was deleted 3 months ago.
This comment was deleted a year ago.
This comment was deleted 2 years ago.