On-chain lending has become the most popular decentralized finance (DeFi) application today, with over $600M in loans originated this year across MakerDAO, Compound, and dYdX. On-chain lending has the potential to disrupt traditional secured lending. But it seems it may do more than that: it might also disrupt proof of stake consensus. Proof of Stake (PoS) in an alternative to Proof of Work in which a blockchain is protected by staked cryptoassets instead of by...
read more
By Haseeb Qureshi and Leland Lee After the DAO hack of 2016, the Ethereum community was faced with an existential quandary: should the community roll back the chain to revert the DAO hack, or let the hacker get away? Those who said yes forked away to what is now called Ethereum. But those who said no, who didn’t roll back, they are now known as Ethereum Classic. This is a classic...
read more
I’m a crypto VC. That means I spend my days talking to crypto entrepreneurs, hearing pitches, and evaluating products. The first thing you realize working in this industry is that pretty much everyone is winging it. (That applies to me, but it especially applies to founders.) Crypto moves at a lightning pace compared to most industries, but there’s no good blueprint for what we’re doing here. We don’t know how large the market will...
read more
When Satoshi Nakamoto designed the Bitcoin protocol, he had the insight to include the notion of transaction fees. These fees incentivized miners to include transactions into blocks. But initially, Bitcoin did not have, in any meaningful sense, a fee market. A large portion of early Bitcoin transactions were completely free up until 2013 (blue in the above chart). Wallet developers eventually hard-coded tiny fixed fees into their clients, thought of...
read more
Here’s a question: why are money transfers so expensive? Visa charges 3% + $0.30 on every US transaction. That’s a lot to charge for shuffling around numbers in some databases. After all, everything in a credit card transaction is already digital—from the online payments gateway, to the credit card company’s systems, to your bank’s database, to the Fed account where your bank parks its reserves. It’s packets and bytes all...
read more
We can safely say the ICO bubble is over now. When the bubble finally popped last year, the “market cap” of all crypto fell over $700B, an 85% drop from its peak in January - steeper than the dotcom bubble’s 78% crash. The media gawked at this collapse, and as usual, proclaimed this was the nail in the coffin for cryptocurrencies. There’s already been enough hysterics and I-told-you-sos. In this essay, I...
read more
Most cryptocurrency pioneers would not call what they’re building “institutions.” The term reeks of centralization—it’s too unsexy. (Except when it’s “institutional capital”, then it’s welcomed with open arms.) In a recent debate between Paul Krugman and Katie Haun on cryptocurrencies, Krugman is asked why he rejects the decentralized vision behind cryptocurrencies. He responds: “We developed this socially ingenious thing: enduring institutions […] and it’s going to be really, really hard...
read more
2018 was an intense year. It’s been my fourth year earning-to-give. Last year I was doing software engineering, this year I’m a partner at a hedge fund. It’s been a year of learning, stretching, and growth. [Nervous Tics by Holly Walker] Resolutions for 2019 I don’t usually do new year’s resolutions, but my life has changed so dramatically in 2018, I think it’s worth making some public commitments. So here...
read more
