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Our Blockchain Future

Our Blockchain Future
By Keith Teare • Issue #266 • View online
Elon Musk, Jack Dorsey, Cathie Wood, Fred Wilson, Mike Arrington all weighed in on the future of the planet this week. Some must-read stuff.

This was definitely a cryptocurrency and blockchain week. Headlines boomed out that Bitcoin had fallen below $30,000. CNBC reported real-time as Elon Musk, Jack Dorsey, Cathie Wood debated (but actually not too much) the future of the world as it pertains to Bitcoin and other crypto-assets. Fred Wilson responded to SEC Commissioner Hester Pierce suggesting that stablecoins are preferable to Central Bank Digital Currencies by agreeing with him, and by so doing implying nation-states were not best placed to “print” money, and directly saying that competition over who prints money would be a good thing for the future of money. And in the same week, my old friend Mike Arrington revealed his next act - having moved to Miami - will be to double down on the crypto industry and invest Arrington Capital’s new fund(s) in the sector.
By far the most interesting thing I read however was the research put out by Arrington Capital explaining its investment into the Algorand blockchain and its $100m fund focused on innovation on that chain.
The short version (I encourage you to read the longer one) is that innovation in the blockchain has moved to what is called “level 2” applications. Basically, things are built on top of “level 1” blockchains. The reason for this is that many have deemed level 1 blockchains to be inherently unscalable from the point of view of the speed of transactions even though they scale in terms of size. That has led innovation to happen in the layer above. But, the paper argues, that comes at a price. The price is a re-centralization of the technology, creating the need to trust third parties when the entire point of the blockchain is to remove trust as a necessity.
Enter Algorand. it is a new level 1 blockchain, as is Bitcoin for example, and Ethereum. It claims to solve much of the speed problem without compromising a fully decentralized and trustless architecture. It also does so with a model that rewards holders of its token by issuing regular rewards for holding.
So why is the research paper interesting. Because I think it is 100% correct in pointing to the centralizing tendencies of blockchain innovation, recreating the architecture of the current generation of the internet where we end up with large powerful corporations that “own” key pieces of infrastructure. Central Government if you will.
The idea that technology can become fully decentralized, with no need to trust participants is also central to Fred Wilson’s reaction to the SEC Commissioner favoring private stablecoins to central government-issued digital currencies. A stable currency is really important in a fully digital money system. Volatility in this or that token can be avoided if there is a stable alternative to swap into at key moments. Tether (USDT) and USDC are both private stablecoins. Tether is valued at $70 billion and USDC at $26 billion. Both are global and readily available to all digital wallets. They can be cashed out for government currency in most of the world. By allowing the global network to use these underlying assets as stable intermediaries between other assets, the ability to store and move value is guaranteed. There is no government role needed.
So when Jack Dorsey says that Bitcoin can bring world peace (actually he didn’t really say that, but he thinks the potential is there) he was really saying that humans can make the world work without governance or the need to trust those who govern. We can simply get on with life because the underlying network simply works.
And the underlying network now brings together a global ability to earn, spend, transact, move or store value, without ever needing to deal with governance.
So Mr. Arrington. I think you and your team are right. The future is decentralized and governed without governments. It will not happen overnight, or without governments of all kinds resisting, but it will happen
For my regular readers…this may be a little in the weeds. But it is very important you out collective futures. By comparison Elon Musk’s rantings this week are pretty insignificant.
Our Blockchain Future
Our Blockchain Future
Our Blockchain Future
Here's what Tesla CEO Elon Musk said about crypto that drove up bitcoin, ethereum
Here's what Tesla CEO Elon Musk said about crypto that drove up bitcoin, ethereum
Ethereum price rises after Elon Musk confirms he owns the cryptocurrency
How did Bitcoin get hijacked? CoinGeek’s Kurt Wuckert Jr explains Bitcoin history on CJTV
Michael Arrington’s next act – TechCrunch
Venture Capital - It's getting serious out there
Index Ventures’ trio of new funds leads to $3 billion, and more TikTok – TechCrunch
Silver Lake to Lead New Carta Funding at $7.4 Billion Valuation — The Information
Venture Capital Investment in Startups Booms in 2021 says PitchBook | Grit Daily News
France - Venture Capital Trends: 17 Unicorns
The Top 100 Companies of the World: The U.S. vs Everyone Else
Tech Earnings Kick Off Next Week—and Growth Numbers Will Be Big — The Information
Slack is now officially part of Salesforce | Engadget
Feed The World
InFarm Bets on Modular for the Future of CEA Growing
Shrink The World?
Has China closed the door to tech firms raising funds in New York? - South China Morning Post
Twitter's Transformation
Twitter starts testing Reddit-like downvote button on iOS | Engadget
Twitter Spaces Will Soon Let You Manipulate the Sound of Your Voice - MacRumors
Attack of the Killer Democrats
Biden nominates Google critic Jonathan Kanter to lead DOJ antitrust division | AppleInsider
Amy Klobuchar’s new bill would repeal some Section 230 protections for tech companies - Vox
Surviving the Office
4 Strategies for Building a Hybrid Workplace that Works
Startup of the Week
Zoom is buying a cloud call center company for $14.7 billion
The Zoom-Five9 deal is a big bet for the video conferencing company
Tweet of the Week
Michael Arrington 🏴‍☠️
My day began with a man I just met poking me in the belly and telling me I look just like Chris Christie and ended with a SEC subpoena on a deal we invested in. See y’all tomorrow.
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Keith Teare

That Was The Week is a editorialized and curated weekly look at developments in tech, startups and investing

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Keith Teare, Palo Alto, California