And as for the blockchain…some of y’all have been trading crypto since like 2012 which means blockchain technology has been widely used for a decade now by thousands of developers around the world with billions of dollars invested in it. So why hasn’t it found any popular usage outside of creating the illusion of value around crypto coins and NFTs?
This is supposed to be revolutionary technology that’s going to take over the world but barely anybody needs it after a decade?
The Token Disconnect
These days I read a lot of cross-disciplinary commentary on the crypto asset bubble, and what strikes me as particularly strange is the sheer level of disconnect between people’s lived experience of this mania. I’ve never seen anything else like this in technology and the topic will divide rooms. Between the software engineers, venture capitalists, economists, and the chattering class there is very little consensus at the base level of reality of what the heck is even going on. It draws parallels between the Indian proverb about the
blind men and the elephant, or perhaps the idiom about the blind leading the blind.
To the overwhelming majority of us in the software engineering profession who live closest to the metal, we see blockchain as a technology that barely works and whose use cases (if any) are vanishingly small and niche. Blockchains are a solution in search of a problem, but in the meantime we’re expected to pre-invest in “tokens” while the decades roll by with seemingly no progress on the fundamental question of “For what?”. It all looks like a form of reverse-innovation where discovery precedes purpose. Perhaps it is our field’s version of
string theory, theoretically-plausible castles in the sky which are built on unfalsifiable claims and are only loosely tethered to reality. But what really triggers our engineer “baloney detection” alarm, is that it’s a set of
incoherent ideas attached to so many get rich quick schemes.
The venture capitalist class sees crypto in a vastly different and largely incommensurate way. At its core their profession is simply about one thing: returning money to their LPs. Crypto offers an genuinely exciting new financial tool for that purpose, arbitraging securities regulation. In the United States institutional and accredited investors are granted the exorbitant privilege of participating in buying private equity in early ventures, a benefit which is not given to the overwhelming majority of retail investors in the country. There are some valid reasons for this separation however they are wrapped in some controversy. After all, the median return on your average tech startup is zero and the level of risk involved in this type of investment is probably not suitable for your average dentist in Omaha who can’t devote all his waking hours to due diligence on technical esoterica. On the other side of this debate we have Juicero and Theranos where allegedly the most sophisticated investors in the world got taken for a ride on the back of their own incompetence.
The accreditation divide is largely the fuel behind the Valley’s obsession with crypto tokens and the 2017 ICO mania.
Suddenly you have an asset class that you can buy from your portfolio companies that looks like a security, swims like a security, and quacks like a security, but is not regulated as a security. In fact it’s not regulated at all. Close your eyes, and you’re seeing dollar signs, dollar signs and limitless returns for your portfolio.
If there is any innovation in crypto assets it’s not in software engineering, but in financial engineering. We’ve created a new financial product like an option contract on a startup potentially building something real, but in case they don’t you can always exercise it early by simply dumping the stock on the public to cash out completely untethered to the company’s success. You don’t need to file a S-1 or have a coherent prospectus about attracting customers or business or revenue. Hell, the company doesn’t even have to have a business model at all, and in fact the best performing crypto assets are the ones that literally don’t do anything at all. They just need to tell a good story.
What’s even more appetizing about the crypto-token-as-equity-proxy scheme is that instead of having to wait a decade for an initial public offering to dump your shares on the public, the shares can be made immediately liquid whenever you want, and you can dump the smoldering carcass of a “company” on the public markets directly without Wall Street getting their cut. Oh, and it’s also like the 1920s again and you can insider trade, wash trade, and pump and dump and there’s basically no enforcement. And in the rare case where there is enforcement the AG is probably only going to want the scalp of the entrepreneur who ran the scheme, not their investors.
@Bigblackted4 @Jekyll @ogc163
wow just wow like read a fukking website to see all the things blockchain is being used for on the horizen... jesus christ the ignorance
