we see blockchain as a technology that barely works and whose use cases (if any) are vanishingly small and niche.

Blockchains are a solution in search of a problem, but in the meantime we’re expected to pre-invest in “tokens” while the decades roll by with seemingly no progress on the fundamental question of “For what?”. It all looks like a form of reverse-innovation where discovery precedes purpose.

The venture capitalist class sees crypto in a vastly different and largely incommensurate way. At its core their profession is simply about one thing: returning money to their LPs. Crypto offers an genuinely exciting new financial tool for that purpose, arbitraging securities regulation.

The accreditation divide is largely the fuel behind the Valley’s obsession with crypto tokens and the 2017 ICO mania. Suddenly you have an asset class that you can buy from your portfolio companies that looks like a security, swims like a security, and quacks like a security, but is not regulated as a security. In fact it’s not regulated at all.

If there is any innovation in crypto assets it’s not in software engineering, but in financial engineering. We’ve created a new financial product like an option contract on a startup potentially building something real, but in case they don’t you can always exercise it early by simply dumping the stock on the public to cash out completely untethered to the company’s success. You don’t need to file a S-1 or have a coherent prospectus about attracting customers or business or revenue.

instead of having to wait a decade for an initial public offering to dump your shares on the public, the shares can be made immediately liquid whenever you want, and you can dump the smoldering carcass of a “company” on the public markets directly without Wall Street getting their cut.

it’s also like the 1920s again and you can insider trade, wash trade, and pump and dump and there’s basically no enforcement.

It’s basically a license to print free money, and I imagine a lot of LPs in large funds are ecstatic about this.

All conversation around crypto is now simply the sound and fury of post-hoc myth making to rationalize away the collective incoherence of the bubble in a near perfect exemplar of the motivated reasoning of economic determinism.