For web platforms considering a token strategy: cryptocurrency vs. dollars?

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A lot of founders / teams have been asking if they should be adopting a cryptocurrency strategy.  This is understandable given the frenzy of fundraising recently and the ongoing dialogue about the potential for cryptocurrencies as an alternative business model for web platforms.

As “traditional” web & mobile platforms explore this option, there are a few important considerations (esp given the risk in this model):

1) What is the advantage of using a cryptocurrency instead of traditional money?  Answers could be: programmability, international exchange, earnability, etc.

2) Could I use an existing cryptocurrency (e.g., zCash) instead of launching my own?

3) From a revenue / value perspective, is there a model for value creation independent of funds that could be raised in an ICO?  e.g., are you just looking to raise short-term funds an alternate to an equity round, or is there a real value theory of cryptocurrency running inside your application?

4) Could you imagine such a cryptocurrency spanning beyond the borders of your own application?  Generally speaking, if there’s a more use = more value theory (i.e., “fat protocols“), there’s an incentive to go broad to increase use.

5) What is the model for internal economics around the cryptocurrency?  E.g., how would people earn it, and how would they spend it, within the ecosystem?

I’ll follow up with more on these in a future post, in particular #5, as I believe that is the most fundamental question.

A little better every day

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I just got done coaching my son’s baseball practice. It has been amazing to watch this group of 7 and 8 year olds improve over the course of the season – learning the fundamentals and now starting to make some pretty great plays. I had a great baseball coach as a kid.  I’ll never forget the… Read more »

Entering the world of smart contracts

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One thing that’s interesting about yesterday’s Basic Attention Token sale is how quickly it went – $36M transacted in 30 sec. Lots of people were surely disappointed as they attempted to buy into the token sale only to have their orders canceled for missing the sale window. I haven’t nailed this down for certain, but I suspect… Read more »

Mechanics of the token sale

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In case you missed it, today Brave raised $36M for the Basic Attention Token.  They had allocated 30 days for the token sale, but sold out of 1B BAT in 24 seconds. The Basic Attention Token (BAT) ICO just raised 30 million dollars in 24 seconds. VC’s didn’t even have time to put on a sweater… Read more »

Open source leadership vs. corporate leadership

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As cryptocurrencies and blockchains have continued to gain steam (and attract capital), a common question in the air is, what type of leader does it take to be successful in this space? A common variant on that question is: “will [leader] need a grownup in the room once they get ahold of all that money from… Read more »

Regulating source code

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As more areas of our economy become computerized and move online, more and more of what regulators need to understand will be in the source code. For example, take the VW emissions scandal: These days, cars are an order of magnitude more complex, making it easier for manufacturers to hide cheats among the 100 million… Read more »

Cryptocurrenices: the native business model of attention

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There has been lots of attention this week on cryptocurrencies and blockchains, what with Consensus conf and the Token Summit and lots of related announcements. And with like lots of new things (thinking back to Twitter circa 2010) I find myself spending a lot of time explaining to people what blockchains and cryptocurrencies are, and… Read more »

The Service Recovery Paradox

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I’m writing this from a plane.  I’ve been in the air for an hour and everything is fine, but for a few minutes before the flight, things weren’t fine.  At roughly the time we were supposed to board (on an already late in the evening flight), the gate attendant came over the mic to announce… Read more »

Complicity

I had an interesting experience today.  As I was in the air on my way to San Francisco, I got a text from my Airbnb host saying that they had made a mistake and accidentally double-booked my room.  I ended up taking their offer to cancel and booked a hotel room (at a steep increase… Read more »

Flexing the platform for good

Over the past few weeks, I’ve been touching base with many companies and individuals in the tech sector to understand how they are reacting to the current political environment. Every company and community (of users, customers) is different, with its own sensitivities, priorities, and goals.  So it’s been really interesting to understand the very wide… Read more »

Cycles

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It’s clear that right now we are in a moment of upheaval and turbulence, that seems to have come upon us very quickly.  Pretty much everyone I know has been wrestling to unpack this for the past several months. I’ve been trying my best to understand the worldview of Steve Bannon, who is clearly an… Read more »

The Public Data Layer

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I have been thinking a lot lately about the increasing importance of the “public data layer” — meaning, data that we will need (“we” applied broadly, meaning the general public, NGOs, government, scientists, journalists) to make sense of what’s going on in and increasingly busy, but increasingly quantifiable world. First, some of the drivers here…. Read more »

Experience ↔ Design ↔ Policy

People often ask me how I ended up working in venture capital, and more specifically in a role that deals with policy issues (“policy” broadly speaking, including public policy, legal, “trust & safety”, content & community policy, etc.).  Coming from a background as a hacker / entrepreneur with an urban planning degree, how I ended… Read more »

Unintended Consequences

I’ve been struck recently by the power and surprise of unintended consequences. For example, a recent Slate article digs into flip side of the life-saving potential of automated vehicles: our reliance on car crash deaths for organ donors: “An estimated 94 percent of motor-vehicle accidents involve some kind of a driver error. As the number of… Read more »

Going after it

I’m in SF this week with the USV team – once a year we all come out here together, do a bunch of meetings and social events w our portfolio. Yesterday struck me — and it’s amazing how much of a surprise this is to me, after doing this nearly 5 years — with just… Read more »

The new normal

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The week before last, my in-laws were hit by a truck while crossing the street after dinner. The time since has been a disorienting whirlwind of sadness, fear, hope and thankfulness.  My mother-in-law suffered a very serious brain injury, and while she has cleared the first hurdle of basic survival, the outlook won’t be clear for… Read more »

Getting out the vote

Yesterday, a fabulous new tool launched — HelloVote: HelloVote makes it easy easy easy to register to vote.  Sign up w your phone number and do the whole thing over text. This is great for a lots of reasons — from its immediate practicality, to its more general lesson that it’s possible to build new,… Read more »

Alternative Compliance

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Summary To better support small businesses operating in regulated sectors, we should develop “alternative compliance” mechanisms — parallel regulatory regimes that achieve the goals of existing regulations but take an alternative, data-oriented approach to achieving them.  Such an approach would be especially friendly to the smallest of small businesses, and would take advantage of available… Read more »