Trading R&D

I read this post this morning on why this fintech analyst and investor is “short ethereum”.

The pro-bitcoin and anti-ethereum arguments are interesting and worth digesting if you are into the blockchain sector as I am.

But more interesting to me is that we are talking about some fairly cutting edge computer science here. Ethereum is still very much a work in progress. A computer science experiment. And a very ambitious one too.

And yet they are tradeable, like stocks, bonds, currencies, etc. You can short them or put on a hedged trade (long BTC/short ETH).

Biotech has long been like this. There are publicly traded biotech companies that are doing cutting edge science and you can place bets on wether these experimental projects will succeed in developing some new medical miracle, or not.

But “tech” has not really been like that. You had to be an angel or early stage investor to make these sorts of bets in the software sector.

Not any more. You can buy and sell alt-coins, token, ICOs, or whatever else you want to call these digital assets.

It is fascinating to see this happening and think about where it might go.


Comments (Archived):

  1. Paul Chou

    Also potentially fascinating is trading within the same cryptocurrency, such as if a hard fork happens within BTC, ETH, etc.When regulators ask me what happens during a hard fork I explain the analogy of trading among different grades of oil. For cryptocurrencies, you can reference the software version and now a trade-able market will show how the market expects different versions of the digital currency to perform over time.That information is an important signaling device that developers can then use to figure out which fork of a software they want to invest their time on.

    1. fredwilson


    2. Rob Larson

      Great analogy

    3. Tuur Demeester

      That’s an interesting comparison! One difference is maybe that the network effect plays a bigger role in cryptocurrency versus oil historically, although over time technology was developed to perform best on very specific grades of oil—which seems to me an interplay between network effect and objective performance standards.If you’re interested, on a similar note, in 2014 I wrote an article called “Why Bitcoin is the Petroleum of our time”:

      1. Paul Chou

        Yep, I do believe networks effects are present in both, perhaps in cryptocurrencies they are stronger.But just imagine a world where you login to github, see streaming prices of the various forks and a developer uses the highest prices (hopefully as one of many factors to consider) as the reason they decide to contribute to a certain project. They might also purchase that digital currency beforehand so they could economically benefit from all future growth in that particular path — a new way to get paid for open source work.

        1. Twain Twain

          Crowd-based weightings (devs deciding which project to contribute to) are all well and good — except …(1.) What measures to prevent gaming the weights?(2.) Is price as a signal robust and comprehensive enough? Do we also need to know underlying the WHYs — in terms of social value — that means one project is more worthy than another to contribute to?This is a form of qualifying the quantification factors of network effects.(3.) Github is mostly navigable by developers. How can non-devs also add their 2 cents to what projects get worked on?If we’re talking about the democratization of digital currency and data, it’s somewhat exclusionary that the design processes of Bitcoin and Blockchain hasn’t included non-technical folks from the start in the thinking frameworks.——I’m an engineer so if I wanted to code some smart contracts today, I could (I don’t).I’m simply observing that when people compare Blockchain to the next coming of the Internet, it surprises me that few put non-technical folks at the heart of the design of that next Internet.

          1. Matt Zagaja

            Apt point from Joi Ito’s interview with Obama:”JOI ITO: This may upset some of my students at MIT, but one of my concerns is that it’s been a predominately male gang of kids, mostly white, who are building the core computer science around AI, and they’re more comfortable talking to computers than to human beings. A lot of them feel that if they could just make that science-fiction, generalized AI, we wouldn’t have to worry about all the messy stuff like politics and society. They think machines will just figure it all out for us.”…As a lawyer I find the idea of “smart contracts” sort of insane. The fact that contracts require work/effort to enforce is often a feature and not a bug.

          2. Lawrence Brass

            As I see it, what a smart contract automates is the contract execution, humans will always be needed to check if the operations associated with the contract are correctly executed in the ‘real world’ and manage the exceptions outside the realm of guaranteed trust networks.Anyway, for that to ocurr, the promise of trusted code and trusted data state must be fulfilled, which has not happened yet.So yes, we still need lawyers. 🙂

          3. Twain Twain

            Thanks for sharing, Matt.Joi Ito’s right. Look what those “predominately male gang of kids, mostly white, who are building the core computer science around AI” are making: https://uploads.disquscdn.c…And those kids and their mentor guys have NO HOPE IN HELL of making the “science fiction generalized AI” for the simple reason that, end-to-end, their assumptions are already wrong.@lawrencebrass:disqus @jessbachman:disqus — There’s probably a video somewhere of a Professor of AI finally conceding the machine brain is an inversion of the human brain after I pressed him about it in front of 1500 people at a Data Science conference.Well, he HAD claimed in his slide that computers:* Emulate the brain.* Simulate evolution.When, clearly, computers and humans aren’t on the same evolutionary path.https://uploads.disquscdn.chttps://uploads.disquscdn.c

  2. Twain Twain

    Straight after my maths degree, I learnt about complex derivatives because I spent the summer after my last exams on the editorial team of nerdy stuff!In some ways, the bitcoin & Ethereum experiments are similar to complex instrument experiments (e.g. Black-Scholes trading models).

    1. Tuur Demeester

      I feel curious, would you mind elaborating on some similarities you see between BTC / ETH and complex instrument experiments?

      1. Twain Twain

        Regardless of what the financial instrument or experiment is, it’s beset by some issues in mathematics which means no system has the “full picture” of risks.It’s to do with the cumulative normal distribution function.Risk has been proxied purely by quant variables (volumes of trades, speed of processing, rate of Ether issuance, etc.).So … when the cumulative normal distribution function gets generated, that’s the only data it operates with because that’s the only data available and that the system has been programmed to watch for and detect.This means the algorithm and network is inherently fragile.Taleb’s “black swan” events are outside of the cumulative normal distribution curve.For Ethereum, given the diversity of the code frameworks used, these questions need to be answered:(1.) How does each component add to cumulative risks and what response mechanisms does Ethereum have in place where one code framework skews the picture they may be getting on that cumulative risk?(2.) In Turing-complete scenarios with infinite loops, there may be inverse normal distribution.How does that then affect the ability to measure and track network risks? https://uploads.disquscdn.chttps://uploads.disquscdn.c

        1. Tuur Demeester

          Thanks! Food for thought.

  3. Rob Larson

    Of course, currently most of the action lies in betting on the coins / technologies themselves.Can’t wait for the day we’ll be able to make these bets on the myriad apps and companies that will be built on top of these technologies.

  4. Twain Twain

    Maybe if Ethereum structure was more like Samantha’s rather than its diamond lattice …https://uploads.disquscdn.c…It would have more flexibility to withstand the network issues.https://uploads.disquscdn.c…That’s a comment on network protocol structures generally — not only Ethereum’s.[Samantha is the OS in ‘Her’.]

    1. Jess Bachman

      I can’t always count on you Twain for taking the shit I don’t understand to the next level. Kudos.

      1. Twain Twain

        Teehee.@fredwilson:disqus can discuss this graphic with Vint Cerf, Marc Andreessen and Sir Tim Berners-Lee. https://uploads.disquscdn.c

    2. Lawrence Brass

      Samantha, despite all its supernatural and learning capabilities, was a failure as it couldn’t handle introspection and contain it-self. At the end of the movie it-she detaches from humanity. Trump? Ethereum? 🙂

        1. Lawrence Brass

          Amazing. Does she talk?Nice ankles. 😉

          1. Sebastien Latapie

            So deep in the uncanny valley! That video creeps me out so much!

          2. Twain Twain

            I’m in favor of Machine Intelligence IF it enables us to make smarter decisions and have better lives, e.g.:(1.) gives us fuller picture of values and risks to stakeholders;(2.) solves cancer.I’m less in favor of the AI looking like us and completely replacing us as a species.

          3. sigmaalgebra

            My solution to the assembly line assignment problem is in…Your solution is a good heuristic but won’t always be optimal.

          4. Lawrence Brass

            Hi Sigma, I will go and see. Purpose of my solution was to buy some time while they unpacked the robots. Would be nice to have an algorithm than considers minimizing the robot swap operations.See you there.

          5. sigmaalgebra

            > Does she talk?For the World model, no.For the EU model, also used in the US, GB, and Israel, yes.Some EU countries also prefer the World model!In Islamic countries, possession of the EU model results in hanging in public!:-)!

        2. sigmaalgebra

          The closeup of her face looks really good, but otherwise she is not quite right with lots of things wrong. Maybe the worst is her elbows.

      1. Girish Mehta

        Bob Dylan won the Nobel Prize for Literature today.And so I think about “Diamonds and Rust” by Joan Baez, which she wrote about Bob Dylan.”…We both know what memories can bring.They bring Diamonds and Rust…”.This song – the words, the voice and the emotion – thats Humanity and Human-ness right there.

        1. Lawrence Brass

          Beautiful. Years I haven’t heard it. My mother played Joan Baez records at home a lot, sweet memories.As for the news about Dylan, amazing. I just knew about it here at AVC, by you.Thanks Girish.

          1. Girish Mehta

            You are welcome Lawrence…the news about Dylan broke on my TL a couple of hours back and I thought of this song, then I saw your comment about machines and humanity :-).

  5. Tuur Demeester

    Oh wow. Thanks Fred! I’m extremely flattered to be featured on your blog in a positive way (I’ve been a reader for two years). Happy to chime in if people have questions or comments that I can help with.

    1. William Mougayar

      You are clearly misinformed and don’t have an insiders view to what’s really going on.

      1. jason wright

        an investor has to be ‘wrong’ to be successful. Soros is an example of insiders view is dangerous if it’s a consensus view, and it normally is a consensus because in human nature the contrarian is not liked by the group and is pushed out. group think doesn’t work when investing.

        1. William Mougayar

          Insiders views give you insights from all sides. To the outside, a VC investment may look wrong, but the VC makes their decisions based on knowing or believing something others maybe don’t.

          1. jason wright

            but it’s all views from an inside, a specific point of observation which can distort reality. see Albert’s Wenger’s tremendously insightful ‘Uncertainty Wednesday’ series of posts now on view outside the avc bubble.

          2. LE

            but the VC makes their decisions based on knowing or believing something others maybe don’t. Exactly. That’s why it’s frustrating to be looking in and commenting w/o the complete picture or being able to listen to the pitch and the plans. So things look especially silly from that perch.That said from the past I know of things that were clearly explained to people in plain english and they still don’t understand and see the value. There could be many reasons for this including different upbringing, close-mindedness or just being stubborn and stuck on old values. That doesn’t make the investor that takes the chance any smarter since typically the time worn and tested view is that the right way to look at things and avoid trouble. I would also argue there are plenty of ways to make money with that strategy.One wonders (to sound pompous) what Warren Buffett would have done if given the chance at an early stage to invest in Uber or Airbnb. My guess is that he would have avoided it even in the face of compelling evidence that it was worth a gamble (his stick to the knitting approach of only investing in what he knows is what I mean by stubborn).

          3. creative group

            LE:”Exactly. That’s why it’s frustrating to be looking in and commenting w/o the complete picture or being able to listen to the pitch and the plans. So things look especially silly from that perch.”In absence of an investor (Angel, Seed, VC, etc.) having basic fundamentals do you feel they are going based on evaluation what can be achieved in most cases verses what actually has been achievedwith burn rate, no revenue, etc. to base an educated investors decision?Your thoughts.

          4. creative group

            William Mougayar:That answer will only depend upon the individual investment. Talking from the DayTrader’s view. We can name one long a majority of investors on this blog have been long (With numerous conflicts of interest) and we have highlighted pants on fire on the Evangelical yells.We just read the tea leafs and have no position in the particular equity in question but validates our point.Insiders views have a vested interest with their mega phones to protect their investment and even when the equity is declining. People can lie but figure never do.

          5. creative group

            William Mougayar:we apparently have misunderstood your post. We are not questioning your integrity but an Insider on a non public startup company is asking the supporting public that may invest to just believe them that they know what is good for them. Similar to the Trust me, Believe me theme from Trump?In absence of the following information we need to trust the Insiders? Is that what you are saying?Cash (Early Stage: Pre- Product/Market Fit)Run Rate (Growth Stage: Post- Product/Market Fit)Annual Revenue (getting ready to IPO)Don’t need to recount Fred’s admission on how much he lost of his own skin in the Tech Crash. That was based all on what was believed to be Insiders knowing what the Insiders didn’t know.

          6. William Mougayar

            I was discrediting the author because of his biased reporting.The key point of Fred’s post- that we are funding R&D in the open- was a bit lost in that debate.

      2. Amar

        That is a “heads I win, tails you lose” argument. I don’t see how anybody can counter that? Unless you can publicly share the insider’s view I don’t understand how that is a reasonable counter.

        1. William Mougayar

          Just read my blog or tweets or book.

      3. Hu Man

        I’m no insider, but I recognize politics. It smells like shit.

    2. Jonathan Solomon

      Tuur’s analysis is very pertinent to the current ongoing discussion within the bitcoin/blockchain space.There is so much noise in this space, including the viewpoint that would lead anyone seeking information on this subject to believe that Bitcoin has become a mere “stepping stone” to some other “blockchain technology of the future” — i.e. something will not be Bitcoin, but will offer greater flexibility (or will simply be more palatable to enterprise and legacy financial institutions).As the author points out, this viewpoint that discounts Bitcoin’s massive network effect and global base of stakeholders is imprudent. Bitcoin is a stable, secure, and mature technology when compared to Ethereum (and other coin offerings). Not to mention, Bitcoin has a massive network made up of millions of stakeholders in the form of Entrepreneurs, Investors, Developers, Merchants, Consumers, and Miners — who are all using and building things with Bitcoin (not “blockchain”) tech.Ultimately, Bitcoin will find stable and smart (albeit slower) methods to integrate the best features of the “outsourced R&D” happening on the newer blockchains such as Ethereum. It may not be a winner take all market, however significant network effect has already been achieved with Bitcoin’s protocol — anyone looking for a way around that simple fact of network effect will find themselves trying to build a mousetrap that’s inferior to one that’s been around since 2009.

  6. William Mougayar

    This article presented a huge reality distortion re: Ethereum vs. Bitcoin. It is written like an amateur analyst with an axe to grind. I’m surprised you gave him an audience on this blog. It would be illegal for an “analyst” to make stock recommendations while holding positions, or without declaring them. And his disclaimer contradicts the title of the post, where he’s clearly messaging to shorting the stock.He is rehashing some old arguments, and sticking to a negative analysis on Ethereum and positive ones on Bitcoin, whereas the Bitcoin reality is not as rosy as the article implies. Both platforms have their challenges and opportunities. The article is an outsiders view from someone who is clinching to tweets to justify their opinion.Yeah, anyone can write anything to get their 15 mins of attention.

    1. jason wright

      ….of fame.

    2. Rob Larson

      William, I think you’re being a little unfair to Tuur. No, he’s not a Goldman Sachs equity analyst, but he doesn’t claim to be. He has found a niche that he cares about, which isn’t getting enough attention from the “important” analysts. He is free to write whatever he believes to be true. You are free to ignore him, or disagree with him. Saying that he doesn’t have enough of an insider’s view to have a valid opinion is a little condescending and insular.

      1. William Mougayar

        I like to call a spade a spade, especially when it’s about an area of my expertise where I know what I’m talking about.

        1. Rob Larson

          I for one would love to read a counter-argument from someone like you explaining why his ethereum pessimism is misplaced.(personally I am bullish ethereum but I know I’d learn a lot from reading such an exchange)

          1. Lawrence Brass

            Yes, yes.. barfight!

        2. Stanislas Marion

          Then enlighten us please. What is wrong in his article? So far all you’ve done is attack his character and qualify his views on Ethereum as negative and his views on Bitcoin as positive. You haven’t addressed any of his concerns or arguments. Tuur backed his views with arguments and didn’t attack anyone’s character, please do the same.

          1. William Mougayar

            Wake up. I’ve been writing about this for more than 3 years.

          2. Stanislas Marion

            None of what you’ve written so far addresses any of Tuur’s arguments.

          3. William Mougayar

            Me or others have written plenty. And it’s not just about writing.The reality is what customers and enterprises are doing with Ethereum and there’s lots of that that is going on.

          4. Stanislas Marion

            So still no arguments…The reality is that Ethereum is currently a total shitshow, now planning not one but two hard forks in a rush because of the current attacks. Exchanges have paused deposits and withdraws of all ETH and ETH-dependent assets.What follies banks indulge in in private is their problem, but it doesn’t bear any importance to the public ETH blockchain/token. If a bank wants to deploy an Ethereum private network because it’s cool or simply because they don’t know how to deploy and maintain a database cluster, then that’s fine, but it doesn’t invalidate any of Tuur’s points. They could also switch to Snapchat from Bloomberg chat. Being cool and young doesn’t make it smart and robust.

          5. William Mougayar

            The reality is that this article makes it sound like Ethereum is dead, whereas it is thriving, not just within enterprise implementations (about 100 of them), but also with 300 innovative startups around it's where the disconnect is.

          6. Tuur Demeester

            I mention that website in the article, in the second paragraph under the header Ethereum’s Ambition: “Ethereum’s programming language is simple to learn and young developers jumped on the opportunity to create decentralized applications (‘dapps’). So far there are 298 such dapps listed.”

          7. William Mougayar

            Tuur’s reputation is that of a bitcoiner. He doesn’t see anything else.I am far more balanced in my opinions, investments, and interests- and the evidence overwhelmingly points to that.But maybe I’m wasting my time with you because you appear to be cut from the same cloth.

          8. Stanislas Marion

            The cloth that looks at actual technical and factual arguments and is willing to have a debate as adults without putting people in ridiculous boxes * cough * bitcoiner * cough ? You should try it sometimes.

    3. Tuur Demeester

      It seems like it’s hard to do right for everyone. When I express a bearish opinion on an asset without disclosing having a position (which I stopped doing), people accuse me of not having “skin in the game.” When I do disclose having a position, I get accused of having an axe to grind or manipulating markets.You are entitled to your opinion about my competence, but in case others wonder about whether it’s fair to call my perspective “amateur,” an “outsiders view,” or being a vendetta of some sorts, I offer this: I’ve been publicly analyzing the cryptocurrency space since 2011. Except for my authorship of a Dutch language financial newsletter, which I found a successor for in 2013, I have provided all my analysis so far entirely independently and made it all available without charge. I have friendly relations with many people in the space, including developers who have been in close contact with Vitalik Buterin from 2013-present, as well as with developers who are generally positive on the future of Ethereum. I’ve consulted with several of them in the +1 year incubation period for this article.You say that my article is rehashing “old arguments.” I’m surprised to hear that, given that the Ethereum network is barely over a year old, and the idea was only conceived in 2013. Regardless, I think “old” or “young” has no bearing on the truth. I feel pretty good about how I wrote out the arguments in my article. There are plenty of links to my sources as well, so I suggest people just read for themselves in order to assess the validity of my concerns.

      1. William Mougayar

        I’m not going to take a conciliatory tone with you, just to be nice. The length of time doesn’t make you right or smarter necessarily. You’re not doing your homework evidently.

      2. kidmercury

        def have to side with Tuur in this beef. i’m not bullish on any altcoin in its current incarnation, but here Tuur presented his case while william went on the offensive without bringing facts or even theses. ergo, Tuur wins the beef!

      3. Twain Twain

        Let’s share an observation with you and @wmoug:disqus.The philosophical basis of Bitcoin, Blockchain and Ethereum was to create a better and MORE DEMOCRATIC system of digital currency and transaction trust that put data access and data transparency into the hands of MORE FOLKS and beyond the walled gardens of “insiders” (e.g. government, vested interest banks and so on).Those “insiders” having had more information (but not necessarily better analysis, judgement or decision-making) and being aided/abetted by the algorithms that resulted in $22+ TRILLION of value losses to ordinary US households during the 2008 global financial crisis.Satoshi’s paper was released during the aftermath of that maelstrom.Reducing the asymmetry of information between “insiders” and “outsiders” is one of the tenets of the Bitcoin, Blockchain and Ethereum movements.The availability of information democratizes analysis and all of us should be open to views, regardless of whether they’re “insider” or “outsider”.Also, since Bitcoin and Ethereum are both experiments as Fred rightly points out, it’s worth remembering Feynman. https://uploads.disquscdn.c

    4. Mike

      Do you have the axe to grind?This space is so new and is not yet fully formed or understood, so relying on your credentials may not mean as much as you suggest. It’s important to pay attention to the criticisms by both camps and to counter them with well reasoned arguments.

      1. William Mougayar

        You clearly don’t know me.

        1. Mike

          I’ve read your blog a bit over the past year. Someone who stands behind their credentials in an argument is someone to be wary of.

        2. Jess Bachman

          You are not really helping your brand here William.

          1. Chimpwithcans

            This is becoming philosophical – who moderates the moderator 😉

          2. William Mougayar

            I’m sticking to my points. This article attacks Ethereum and I’m defending it. It even mis-characterizes where Bitcoin is at.

      2. William Mougayar

        You can say whatever you want. Have you been to DevCon2 2 weeks ago in Shanghai?

        1. Tuur Demeester

          I feel annoyed with these arguments from authority. I can play that game too: Were you at the Libertarian Alliance conference in 2008, where David Friedman lectured on the social consequences of anonymous e-cash? Were you at the London Bitcoin Conference in 2012 where Mike Hearn explored the future of smart contracts on a blockchain?

          1. William Mougayar

            No I wasn’t. But that might be more relevant to you than it is the piece we are debating. I was there when Ethereum was a twinkle in V’s eyes, and I am deep into the Bitcoin ecosystem as well.

    5. Cam MacRae

      Very uncharacteristic poor form from you today, William. Do you need a hug?

      1. William Mougayar

        Not really. My standards are high, and this author hasn’t even talked to the Ethereum Foundation or to those in the trenches that are implementing the technology. It’s well written, but doesn’t make it factual.Much of it is not credible.

        1. Cam MacRae

          I understand. There are things that irked me too. Yet, I vastly prefer it when you play the ball and not the man.

          1. William Mougayar

            True, but this was a corner case I made exception to. The author is a known old Bitcoiner and he just cherry picked negative arguments from some biased people to support his already known thesis.I called a spade a spade because on the surface many people may see it an objective analysis, whereas it was far from that. That author is repeating his behavior and propagating erroneous opinions, appearing as analysis.

    6. Evan Van Ness

      I’m with William. The piece Fred linked to was just a lengthy rehashing of Bitcoin maximalism with lots of links to tweets by Bitcoin maximalists.As a minor (but telling!) point, he criticizes client diversity. Yet, the fact that the protocol is implemented in several languages actually provides network robustness, as we recently saw during the recent DoS spam attack when the Go client struggled.In general, this is just one person’s opinion that a relatively nascent technology doesn’t work. Yet, to quote the piece “Here is probably a good place to acknowledge that I’m not a computer scientist nor even a coder.”Such a disclaimer wasn’t necessary, it was already evident from reading the arguments.

  7. jason wright

    framing an argument around pro-bitcoin and anti-ethereum (or visa versa) seems narrow to me.bitcoin is a civil war with no end. ethereum’s main chain architecture will not scale. look elsewhere for innovation in this space.

  8. Matt Zagaja

    Kind of weird to think that just because a technology succeeds that the initial version is also the one that succeeds in the market. Isn’t that a theory of business largely disproven by Xerox and Apple? Is there anything stopping the folks at Goldman Sachs and Morgan Stanley from waking up one morning and creating the Sachschain based on the blockchain tech out there and deciding to standardize on that?

    1. Tuur Demeester

      I’m not sure who you’re responding to, but I agree that it’s dangerous to be complacent when it comes to technology. “First mover” and “network effect” only take you so far—in order to survive and thrive long term, you need a platform that performs better than the competition. My benchmarks for Bitcoin are security and user autonomy, because I see it as digital gold, a “bearer asset”. There I see no competition on the horizon as of yet. As a secondary factor I would say scalability, which is also being improved upon greatly (though this is a subject of controversy).

    2. Joe Cardillo

      It’s a strange, classic 10x vs. 100x thing. Until there are enough players in a market, whoever’s doing the 100x advance no matter how inelegant will usually dominate.Though, I can’t imagine the Wall Street giants or big banks truly getting into blockchain core tech themselves, at least not until it’s more about presentation than it is building the platform.

      1. Girish Mehta

        Attached article Joe -…(it is written by Nathaniel Popper, author of Digital Gold).and this excerpt – “…If the central banks succeed, it would be one of the greatest unexpected twists in new technology: An invention aimed at dethroning central banks and making it harder for money to be tracked instead ends up empowering those central banks and making money more easily traceable”.My sense -1. Blockchain tech – I don’t see why banks would not be looking to see if they can leverage or co-opt. There is a different conversation whether large corporations/incumbents can absorb something radically innovative; that conversation is non-specific to blockchain and is as much about organizational behaviour…but as a core tech, sure…I wouldn’t be surprised if they are looking at blockchain closely.2. Bitcoin as money is a different question altogether.

        1. Joe Cardillo

          Agreed on #2, that is something I don’t know much about.Re: core tech, I guess I should have clarified and said, I can’t imagine the Wall Street giants making it work. They are of course seeing the possibilities, and having watched the Fed for about a year, they are also sending signals (and appear to get how the core technology functions). There’s no question there’s opportunity, and they want in.But the foundational giants of finance that Bitcoin is destabilizing, they haven’t fallen yet. They can’t even handle not opening multiple fraudulent accounts for basic consumer and small business accounts (WF is far from the only one doing this, even if you are being conservative in estimating the problem). Cryptocurrency is antithetical not just to one co’s business model, but to the industry. They are years away from being able to deal or understand it, I think.

    3. LE

      Agree and what you are talking about is really who can create a defacto standard. In the case of the PC it was Microsoft aided by the IBM contract. Before that there were earlier players (including Apple) but the seminal event happened with the IBM PC running DOS. Later Lotus further sewed it up by becoming a defacto standard for PC being compatible.

  9. Mike Lally

    Is there a mutual fund (of sorts) that trades in the digital assets?

  10. jason wright


  11. pointsnfigures

    long/short, arbitrage. It makes markets efficient. Never demonize the speculators. I have a vision of where this can go, and it’s not small. For comparison, the FOREX market transacts trillions per day. Let’s start there.

  12. sigmaalgebra

    Case A: Biomedical is awash in research. Many of the biomedical VCs have MD degrees, relevant Ph.D. degrees, or both. Biomedical VCs can evaluate biomedical R&D work and directions. Part of this situation may be due to the facts that we have the fully serious NIH, a whole funding agency devoted just to R&D for health care, and generally people take health care seriously.Case B: For the past few decades, Silicon Valley information technology is essentially devoid of anything like serious research. Nearly no information technology VCs have relevant Ph.D. degrees. Silicon Valley information technology VCs are nearly never able and otherwise refuse to evaluate information technology R&D work and directions. Part of this situation may be due to the facts that we have no serious agency of Federal research funding aimed just at R&D for health care and generally people take information technology much less seriously than health care. Generally the assumption is that academic research in information technology belongs in departments of computer science when, really, based on relevant research competence, pure/applied math and even EE are better except for the facts that neither is much interested in information technology.Net, for Silicon Valley, R&D for information technology is laughed at. Instead, their idea of R&D is not much more than, say, a new, open source programming language or, as in artificial intelligence and machine learning, large data versions of old regression analysis.So, information technology entrepreneurship is very short on serious R&D. The flip side of this situation is an opportunity.

  13. Kurt Stangl

    I am very interested in the blockchain. IMHO The branching event in the Ethereum community just went through proved that ETH is a better more democratized technology and escapes the dead-ends bitcoin ends up in.Underneath the veil, bitcoin seems to extend the human problems of bureaucracy and lack of agile control locking things up when the model is evolved in the same way computer systems suffer from Conway’s Law (maybe that’s what’s in play?)It’s been fascinating to watch but I think ETH is going to be the long term winner.In any event I’d love to see blockchains adopted for all sorts of things and I’m exciting to see what Bank of America does with it. I was pretty surprised to see them back a big project but happy to see nonetheless. 🙂

    1. monkey bars

      Name one dead-end.

      1. Kurt Stangl

        Ok just so we’re on an even playing field you’re baiting me and this isn’t the foundation of a dialogue because it seems by the question that you really just want the opportunity to explain why you think I’m wrong.If you want more than just a fish on your hook to beat with a baseball bat then we can have an interesting discussion.You’re clearly a pro-bitcoin SME and I respect that a lot. I’m a huge fan of all these technologies though I see many more immediate uses than replacing money.From a product perspective there are a lot of dead-end’s for the common person. The first big dead end is widespread adoption. You’re asking people to be comfortable with something other than money and sociologically speaking that’s a really difficult proposition and skews the adoption timelines everyone is looking at. To get bank and government support will take a long time, get more complicated and ultimately be a complicated and fragile system that is hard to manage. It won’t be the first technology that in the hands of the world at large became warped and nearly unusable.The other main problem I see in the Bitcoin community has more to do with the people involved than the technology. The problem is that humans tend to arrange themselves in top-down pyramids and if by Conway’s Law government and large institutions are running the products in question, they’re going to be full of waste and become unwieldy and make adoption more difficult. There is only so far you can go with just tech and not involving government and society. With that, I’m seeing the same problems in the Bitcoin community that I see in politics today. People conditioned by industrial age thinking is driving organization and planning and creating the same pyramid power structure forming around it which kills the little-d-democratic nature of the technology.

        1. monkey bars

          1) A UX problem is not a dead end. Mainsteam adoption in the developed world won’t happen until many other factors are in place, a process that takes many years. It’s only been 7.5.2) What you describe as a tendency for hierarchy is disproven by many organizations in history, most notably the internet. The world is changing; the faster information can move, the less effective and efficient hierarchies are, and the more powerful networks. Don’t get caught off guard when the cherished hierarchies you take for granted crumble strut by strut as the century bootstraps on. Good on you that you’re even aware of Bitcoin and its potential.

  14. Evan Van Ness

    Shameless self-promotion:Feel like it’s hard to keep up with all the Ethereum news, projects, and ICOs? That’s part of why I started my weekly email newsletter about Ethereum and its ecosystem.Latest issue here: http://us14.campaign-archiv… Sign up form:

  15. howardlindzon


  16. creative group

    CONTRIBUTORS:reread the VC talking from Fred.VC’s may become excited about a technology they are, have and will make a profit from so any new adaptation or iteration of the initial technology they usually have made the profit or switched to the new money generator before the commoners realize.The King makers are sought by the technologist because they need the funding to further the invention or to provide worry free work.The DayTraders among us have to read the tea leafs and realize a profit from the edges.

  17. creative group

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