Occasional musings on crypto from an early investor, entrepreneur, and two-bit idiot.
TBI's Daily Bit

Self-Awareness & Self-Fellatio

April 23, 2018
Daily Bit

[TBI Headline Note: Just testing your corporate spam filters.]

The self-congratulations and lack of awareness is without a doubt the worst part of crypto. It sure would be refreshing to see a team write a post-mortem of their acquihire with humility, or watch a rookie fund manager discuss investment performance with grains of truth.

Something like this for the acquihires:

"We had a smart team, an exciting vision, and great financial backers, but we underestimated [x] market headwinds, we screwed up [y] deployment, and our decision to steer resources to [z] proved too costly to overcome and remain a going concern. But we believe our experience is valuable to [ABCco], which has found product-market fit, and we’re excited to be able to join their team and return some capital to shareholders. Onward."

Or this for investment managers: 

“We’ve been lucky to deploy capital during one of the greatest bull runs in financial history, and we’re working hard to find alpha in a fully correlated market so that we can justify our fees over passive alternatives."

But people don’t like to admit that they pivoted, or that they’re underperforming the bull market, or that they just simply said something stupid.

It’s inconvenient socially to reverse oneself, and that’s not going to change any time soon.

Fortunately, there’s twitter!

At their worst, twitter critics can sound like nocoiner losers or envious haters. At their best, they keep everyone in check.

I love twitter.

It’s a great place to mix it up and stress test ideas, and as a forum to call people out and get called out. The more aggressive, the better. Truth to power!

You just need to develop a filter so that the mean and stupid tweets don’t get to you, and the mean and smart ones help you retrace your steps after you said something stupid.

It takes practice to tell the difference, but it’s a cure all for the self-congratulations and total lack of self-awareness in crypto because people will pounce on you when you are wrong or tweeting like a jerk.

Fortunately, I’m an expert in twitter wrath given my inauspicious start as an anonymous troll. (I’m still blocked by @jimcramer and @rabois, I think.)

That’s why I can appreciate a good Saturday night beef, genuinely like both parties involved, and still actually learn something. Meltem went on a tear on Saturday. Here was my favorite with Nick Tomaino:

Great snark. The original tweet reads like a bad Silicon Valley outtake. 

Ahhh, but there’s a trick. This was only half of Nick's original point. He elaborated.

Nick: "The “everything is a security” approach to regulation would have the (perhaps unintended) negative consequence of preventing the masses from participating in wealth creation, making our industry once again a rich person game."

Makes the original tweet seem innocuous, but still:
Meltem: "how many token sales have you invested in at a significant “pre-sale” discount? speaking for myself, a good number. it’s still a rich / privileged person’s game. ultimately, the end goal is your statement. for now, the system persists.”

Nick: "Our fund has made 9 investments in total. We haven't made 1 pre-sale investment where a group of exclusive investors gets a better deal than the crowd right before a public sale without taking more risk, and we won't. You can follow along here:"

We all learned something! 

Granted there were four qualifiers in that final tweet ("exclusive investors”, “better deal than the crowd”, “right before a public sale”, “without taking more risk”), but 1confirmation has now publicly confirmed they won’t pump and dump.

In the Wild West of crypto, it seems like a good thing to box people into a corner like that when it’s in the name of transparency and fairness. To call bullshit when you see it.

The alternative is that the insiders will still whisper about the bad behavior, but the outsiders will remain unaware. Consider the alternative from my DMs re Coinbase’s acquisition:

“A $120m acqui-hire. I guess a16z co’s are like banks after all…too big to fail and get bailouts! The amount of Silicon Valley self-fellatio on this deal will be off the charts!”

“Revisionist bullshit. 21 pivoted multiple times when Balaji was at the helm."

Is it in the public interest to have these conversations publicly, or should we let the acquihired save face and craft their own narrative?

How about calling out the preferential prices that venture funds get? Should we stop asking pointed questions like "do you think your portfolio token derisked itself by 90% in the three months you had pre-sale access"?

Where do we draw the line on call-outs, and for whom?

My bias is to always call BS publicly. And it's why I follow people who call me out in return. Because twitter is a pretty low-impact service for boosting your self-awareness.

And ensuring that you never get accused of...ummm...the latter part of my headline. 



I Like Pictures

Network Value to Transactions (NVT) is a sometimes controversial indicator in crypto. But it can help tell part of a larger story regarding usage of a given cryptoasset.

Look at bitcoin, where it's clear the network value quickly outpaced transaction volume in the run-up during late 2017. Even as prices are on the way back up following Q1's sharp correction, the NVT ratio is once again falling.  

More underlying transactions to support price? Or more room to fall?

Red Pillz

The volunteer army at Messari is building a free, open-source library that anyone can use as a resource, so you can go down the crypto rabbit hole a bit more efficiently.

Today’s profile is Pied Piper. The project is working to build a “new internet” that runs decentralized applications. Users store their own personal data and can set custom permissions to let apps access it when needed. The browser already has a handful of apps you can use today.

Our community isn’t slowing down so keep an eye out for more profiles and some new features.


TBI's Compression Algorithm

Vitalik’s on Radical Markets. Vitalik breaks down Eric Posner and Glen Weyl’s new book, Radical Markets. Posner and Weyl are best known for their controversial embrace of "Harberger taxation," which encourages "shared ownership" by proposing everyone list the self-assessed value of their possessions on a common database, pay annual "use" taxes on possessions, and ultimately offer to sell possessions to anyone willing to pay the listed price. Their latest book examines the way changes in markets and property rights (like their proposal) could affect the political economy, and Vitalik muses on how Ethereum and decentralized economic institutions may change money, law, taxation, and governance. He talks about token-curated registries, markets for CAPTCHA services, digitized peer to peer savings and credit associations, etc. New organizational tools that allow groups of people to create and access new markets without requiring potentially contentious society-wide changes to political and property rights. The open-ended question Vitalik asks: could decentralized institutions solve the defining challenges of our time (e.g. developing informational public goods, reducing global wealth inequality, regulation of cryptocurrency products, etc) while ensuring quality in an open society? Vitalik's Blog

The EU’s tightening regulations over cryptocurrency AML. The European Parliament passes new legislation (by an overwhelming majority) to prevent the use of cryptocurrencies in money laundering and terrorist financing. Cryptocurrency exchanges, platforms, and wallet providers in Europe must register with the appropriate authorities and apply rigorous due diligence procedures, including customer verification. Coindesk | EU Parliament

China Launches Another State-Backed Blockchain Fund. Earlier this month, China’s Xiong’An Global Blockchain Innovation Fund announced its $1.6 billion fundraise, which included $500 million from the HangZhou Government. This week, at a blockchain conference hosted by the Chinese Electronic Commerce Association, the ShenZhen government announced the launch of a blockchain investment fund of its own. The fund will contribute $80 million to the development of blockchain projects, and has already picked over 100 blockchain-related projects to develop. China is putting serious money into public-private partnerships. Will be interesting to see if other countries follow suit. Sohu | Coindesk

Quick Bits (Don’t read that, I read it for you)

Choke Points 
+ The CEO of Monex Group, one of Japan’s largest online brokerage firms and recent Coincheck acquirer, says strict regulation over crypto exchanges is common sense since they are so similar to banks.

Startup Signals
+ Robinhood expands to another state. Colorado joins California, Massachusetts, Missouri, and Montana in the early states whose residents can use the new app to trade Bitcoin and Ethereum.
+ Tezos is back up and running. The team's latest blog post update shares its plans for the upcoming launch of the Tezos betanet (Q2) and mainnet (Q3). 

BigCo Noise
+ J.P. Morgan has partnered with the National Bank of Canada to test debt issuance on Quorum, its blockchain platform.
+ AWS introduced new templates that would allow its clients to launch an Ethereum or Hyperledger Fabric network in a matter of minutes. 

The Powers That Be

+ At Taiwan’s AML and anti-terrorist financing conference last week, Taiwan’s Minister of Justice said in an interview the ministry would have a completely legal framework for AML regulations for cryptocurrencies by November of this year.
+ The third co-founder of Centra (that dope Floyd Mayweather-backed ICO) was arrested last Friday morning joining his two former colleagues. The DOJ’s complaint charged him with securities fraud and wire fraud offenses. In an attempt to define “fufu”,  the DOJ cited Urban Dictionary in an official federal securities law complaint. 

+ What’s in a name? Apparently, a ton of rebranding. Coindesk covers some “power names” in the crypto industry. Of little/ no surprise: Lord of the Ring and Game of thrones inspired-names are especially trademark-worthy. 

Did I miss something big?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I really whiffed, I’ll include your bit tomorrow (with attribution).


Shameless Plugs

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