One thing that keeps surprising me is how quite a few people see absolutely nothing redeeming in web3 (née crypto). Maybe this is their genuine belief. Maybe it is a reaction to the extreme boosterism of some proponents who present web3 as bringing about a libertarian nirvana. From early on I have tried to provide a more rounded perspective, pointing to both the good and the bad that can come from it as in my talks at the Blockstack Summits. Today, however, I want to attempt to provide a coge...

Upfront disclosure: I am long both Bitcoin and Ethereum (personally and also indirectly via USV). In preparation for the annual meeting at USV, we have been putting together some slides on the cryptocurrency market. Looking back at the last year I was most surprised by the run-up in Ethereum as part of the ICO craze. I did not see that coming to nearly the extent that it did. While the ICO is an important innovation, there has definitely been an excess both in the amount of money raised for s...

There is a confusion about Bitcoin that trips up a lots of people when they first learn about it: the blockchain is organizationally decentralized but logically centralized! What does this mean? Here is a 2 x 2 matrix that should help:The “organizationally centralized” column on the left contains systems that are controlled by a single organization (EBay and Microsoft in the examples, but this doesn’t need to be a corporation, it could also be a government). Conversely the “organizationally d...

A couple of weeks ago I wrote a post on bitcoin as protocol that got a couple of hundred comments from which I learned a lot. This is an important topic and Chris Dixon has done a lot of good thinking and writing on this. He has a new short post on the relationship between Bitcoin and the Byzantine Generals problem. Chris wrote this mostly as a reaction to various New York Times coverage of Bitcoin which so far misses the protocol innovation. While I agree with Chris, here are some (possibly ...

Today’s post is over at USV. It describes why bitcoin is a potentially important protocol that could enable a lot of innovation.

Anybody following bitcoin will know that the cryptographic currency had a huge run up recently that has brought with it an increase in fraudulent activities, including a DDoS attack on Mt. Gox and an epic theft of $3.5 million worth of bitcoin described in Felix Salmon’s long piece. I have been skeptical about bitcoin because of the built in deflation and because I have a growing concern about the use of crypto more generally. And it is entirely possible the bitcoin will be to crypto currenci...

This is the week for “revisited” blog posts. Today: bitcoin. In my first post about bitcoin I expressed my concern that we may be experiencing a speculative bubble that might ultimately destroy the currency’s usefulness. Since that post, which was just last week, the $/bitcoin rate has gone from $8 to $26! That’s already above the target estimate for the currency that I heard from one entrepreneur working on a bitcoin related business. I ran across another link recently suggesting that were b...

Like many others, I find myself fascinated by bitcoin. Not only is it a wonderful example of the real world catching up with science fiction, but it also shows off the incredible power of the Internet to disrupt existing institutions (there are already some lobbying efforts to have it banned). As I am wondering about the implications of bitcoin, including possible investment opportunities that it may create, I am wrestling with quite a few questions. I will pay some nominal amounts in bitcoin...