Posts from June 2021

I just backed this project. I love the idea of a simple deck of cards that can let anyone or any group design a website without any software or device.

So many times, I have known pretty much what I want for a website for a project, an event, a new business, or whatever, but I am a terrible sketcher and I don’t know how to use the software tools that web designers use. A deck of cards would be ideal for me and probably a lot of other people too.

Email readers can watch the video here.

On Monday, a copy of Startup CXO, my friend Matt Blumberg’s new book, arrived at the USV office. I picked it up to take a quick look and thought “this a heavy book!”

So I texted Matt, congratulated him on getting the book out, and then asked why it was so heavy. He replied “because it is 640 pages, there is a section on every C-level function in that book.”

That’s when I realized that Startup CXO is not really a book. It’s a “field manual” to scaling a leadership team and company. It is the kind of book you will keep by your desk and pull out from time to time to figure out how to approach an issue or to help one of your senior leaders figure out how to do that.

And in that context, it’s a very valuable resource for CEOs and leadership teams as they scale a company and find new challenges around every corner.

The book is now out in Kindle and Hardcover. I recommend the Hardcover so you can keep it handy and pull it out from time to time when you need a quick primer on something.

Digital Asset Mining is shorthand for “proof of work consensus validation of public blockchain infrastructure”. Thankfully we have the shorthand. But it is important to understand what digital asset mining is.

Public blockchains, like Bitcoin and Ethereum, store data securely but publicly in a cooperative ecosystem that is not controlled by any company or government. When you store data on a public blockchain, it is your data, secured by your keys, and nobody can do anything to it without your approval.

That is a big deal and it is the future of all internet data. In time, all software systems will operate on top of secure public blockchains.

The consensus mechanism in public blockchains is the method that they use to cooperatively validate transactions without a controlling party.

Proof of work consensus is when computers all over the world run software (called nodes) and validate transactions and are rewarded with digital assets (tokens).

So proof of work mining and its cousins like proof of stake validating is the foundational infrastructure for the coming architecture for internet data.

Think of Bitcoin mining operations as the next Amazon, Google, and Microsoft Cloud offerings except that they are owned by everyone.

That’s a huge deal. As big of a deal as anything in tech and tech policy right now.

Ok. Now that we’ve had that discussion, let’s talk about a bill under consideration by the New York State Legislature that would put a three-year moratorium on proof of work mining in New York State. I had thought that this bill was going nowhere as of last weekend, but it seems to be back on the table now.

I am a fan of regulation on the emerging blockchain and crypto sectors. Anything as important as the next generation of internet data architecture needs regulation.

But this New York State bill is like using a sledgehammer when what is needed is a scalpel.

Three years is a long time in a fast growing emerging tech sector. The foundational infrastructure for public blockchains is being built now and regions that get going now will have long lasting businesses that provide good jobs and lots of growth. Who wouldn’t want Google, Amazon, and Microsoft operating their data centers in their state? This is the next generation of that.

The issue that has everyone up in arms is the carbon footprint of proof of work mining and that is something that is important to discuss and using regulation to address it makes sense. It may well be that proof of work consensus has no larger carbon footprint than the data centers of the cloud era, but that’s not really the point. We can and should do better. We can have a climate-neutral data architecture when we build the next-generation tech stack.

So here is what I think would be better policy for New York State:

1/ Apply a tax surcharge to digital mining operations in New York State that use fossil fuels to power them.

2/ Use those tax revenues to subsidize digital mining operations in New York State that use clean (renewable, nuclear, etc) energy to power them.

3/ Encourage digital asset mining in New York State with other policies that will bring the data centers here vs elsewhere.

4/ Become the home to the cleanest and largest digital asset mining operations in the world.

We can do that New York State. We just need to want to.

We had a situation recently where a rooftop solar project on a building we own became too expensive (because of NYC Fire Department requirements) and it no longer made economic sense to do the installation. And yet we want to avail ourselves of solar energy to benefit from the economics of solar, to reduce our carbon footprint, and to increase the resiliency of our property.

So we are reaching out to some community solar developers in NYC who have built out solar infrastructure that the community can participate in.

I’ve been interested in community solar for a while now. It makes sense to me that a group of people can build and participate in a solar installation where it most makes sense and then share in the energy that installation generates.

Community solar works best when a consumer can receive a credit on their electrical bill for their community solar output. This is possible in the states that have deregulated their electrical systems.

At USV we think community solar represents an interesting way to participate in the renewable energy business and we are looking at a few opportunities now and would like to look at more.

I backed this project last week and think the idea is really great. You put a Terra device outside where you hear the sounds of birds in nature and you can then listen to those sounds indoors. There are also features that let you identify the species of birds and track their migration.

The video is here for email readers.

One of the biggest challenges for developers building on Ethereum’s market leading smart contract platform/blockchain are the high fees and slow transactions. These issues arise from the fact that the Ethereum blockchain’s current architecture is not particularly scalable.

The Ethereum core developers have been working on these issues for years and there are changes coming in the core Ethereum protocol that will help with scalability. But the broader Ethereum community is not relying entirely on the core developers to address these issues. There are a number of “layer two” solutions that have emerged that will bring very significant increases in speed and lower fees.

One of these layer two solutions, called Zero Knowledge Rollups, is particularly exciting to us at USV and earlier this year we invested in a project called Matter Labs (also known as ZKSync) that has built what we think is the best approach to Rollups on top of Ethereum.

My partner Nick posted today about ZKSync and outlined why we are so excited about this approach. If you are a developer building on Ethereum and are looking for a good layer two solution, you should absolutely read Nick’s post. I would also recommend it for anyone who is invested in or interested in Ethereum as layer two scaling solutions will likely unlock a lot of value in the Ethereum community over the coming years.