[HN Gopher] A16Z is the "worst and largest" scammer of all, says...
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A16Z is the "worst and largest" scammer of all, says CEO of Swan
Bitcoin (2022)
Author : ossusermivami
Score : 199 points
Date : 2023-01-03 21:18 UTC (1 hours ago)
(HTM) web link (bitnation.co)
(TXT) w3m dump (bitnation.co)
| ETHisso2017 wrote:
| This article reads like someone put Klippsten's November thread
| into ChatGPT
| ldjkfkdsjnv wrote:
| At a private event with a16z investors, among other VCs, I was
| told:
|
| 1. Crypto is primarily preferred due to early liquidity and being
| able to dump the bags on someone else. Old school startup models
| lock up too much capital.
|
| 2. Under the table deals mean that privately (kept a secret) some
| well known VCs have exited coins long before the ICO
| JumpCrisscross wrote:
| I'm increasingly convinced, and thank god, I'm finding similar
| minds on the Hill and in D.C. broadly, that anyone in
| leadership in crypto or web3 is perpetuating a scam or an
| idiot. The former should be prosecuted. The latter, fined under
| a deferred prosecution agreement.
| scifibestfi wrote:
| Told that by whom?
| dvt wrote:
| > Old school startup models lock up too much capital.
|
| I've gotten in debates here on HN before about this, but a VC's
| job is _literally_ to multiply capital. Crypto has been
| extremely good for business (and, more key, for the numbers). I
| honestly don 't see how anyone takes issue with a16z dumping on
| crypto bros any more than a16z over-funding a startup which, in
| turn, completely obliterates their competition. Not to mention
| SPACs that have been doing basically the exact same thing, as
| well. I have as much sympathy for degenerate crypto gamblers as
| I did for Citadel Capital.
| JumpCrisscross wrote:
| > _don 't see how anyone takes issue with a16z dumping on
| crypto bros any more than a16z over-funding a startup which,
| in turn, completely obliterates their competition_
|
| One of these is securities fraud.
| dvt wrote:
| Until Ripple v. SEC is settled, this is hypothetical.
| wpietri wrote:
| This is totally believable and such a disappointment to me. I
| remember back when Andreessen Horowitz was founded and at the
| time I thought it was a breath of fresh air among VCs. I even
| went by their offices and talked with one of their in-house
| recruiters about some of their portfolio companies. Sad to see
| them fall so far.
|
| I got into computers because I could help people by making
| software. Since then "value for value" has done a lot to guide
| how I spend my time. Seeing them and so many others get sucked
| into anything that makes money, no matter how poisonous, feels
| like such a loss.
| spamizbad wrote:
| Carl Icahn called out a16z's dirty dealings almost a decade
| ago but there was still too much rage and fallout from the
| financial crisis for him to be taken seriously outside of the
| realm of finance. VCs were the good guys and the hedge fund
| managers were the bad guys back then.
|
| To me, I am just appalled at how deeply cynical the whole
| crypto/web3 thing ended up being. I was always bearish on it
| but I assumed at least the people investing in it were true
| believers.
| AlexandrB wrote:
| > 2. Under the table deals mean that privately (kept a secret)
| some well known VCs have exited coins long before the ICO
|
| My understanding was that until the ICO, the coin isn't
| available for purchase by the public. Who is providing the exit
| liquidity in a pre-ICO exit?
| yao420 wrote:
| So I think it's a little more complex. Let's look at one of
| AZ16's blockchains projects.
|
| Ava Labs is the company, Avalanche is the blockchain, Avax is
| the token.
|
| https://www.crunchbase.com/organization/ava-labs/
|
| They launched a series A in 2019. The Series A was $6million
| and was joined by Andreessen Horowitz (a16z), Initialized
| Capital and Polychain Capital, in addition to angel
| investments from Balaji Srinivasan and Naval Ravikant.
|
| Two private token sale in June and July 2020 for $12m and
| $42m. Are the VC's and insiders getting a cut?
|
| Then finally a public ICO in sept 2020 to raise $240 million.
|
| They also had a funding round of $350million in April 22.
|
| Ample time for early VC's to make money. It's valuation is
| $5billion. That's the same as Coinbase which is a legit org
| with billions in revenue.
| clpm4j wrote:
| Less-sophisticated "professional investors" I would imagine.
| moritonal wrote:
| Imagine a friend tells you they know a way to get in on a
| coin pre-ICO! You've heard how valuable that is so you're
| interested, but apparently you have to have a large amount of
| capital, so you get some friends to join you. You ain't going
| to miss out on the golden goose!
| ralph84 wrote:
| Presumably the SBFs and CZs of the world, who then use the
| pre-ICO shitcoins as reserves on their balance sheet.
| [deleted]
| [deleted]
| [deleted]
| eh9 wrote:
| These next couple of decades are going give us the absolute best
| financial crime documentaries. I'm here for all these
| documentaries based on tweets.
| wolverine876 wrote:
| Remember when Silicon Valley was about innovation; meritocracy (a
| person in their garage with a better idea could overcome a
| corporate behemoth); and a belief we could solve any problem
| using reason, knowledge, intellect, and creativity (HN is about
| 'intellectual curiosity'), and that we could build a better world
| by empowering everyone. A place were someone with an idea could
| go and live their dreams.
|
| Now it's the the world's leading agent of corruption, mis- and
| disinformation, lust for power over others (including anti-worker
| management, anti-democracy and support for authoritarians),
| megalomania, and post-truth 'thinking'. Investments are in
| bitcoin, VCs' and founders' massive egos, and even real estate.
|
| The former was where a generation of innovation came from. Where
| do the leaders and people of SV get the idea that somehow that
| will continue. It's like they think they sh-t gold.
| paulpauper wrote:
| From $32 to $ https://coinmarketcap.com/currencies/braintrust/
|
| Worldcoin worthless
|
| From $55 to $1.6. about as bad as FTX
| https://coinmarketcap.com/currencies/helium/
|
| Andreessen was right about Facebook, his other investments have
| been stinkers
| mikedouglas wrote:
| It's overwrought takes like this that fail to see the real issues
| at play. Many of those projects were all good faith efforts and I
| haven't seen a shred of evidence that a16z was mass dumping
| tokens (most articles confuse a16z's first crypto fund, which did
| well, with the funds that were deployed in 2020/2021).
|
| With all that said, a16z (and other top VC firms) are at or near
| the top in the list responsible for inflating the crypto bubble.
|
| 1. They weren't aligned with their LPs. The economics
| fundamentally changed for them as their funds 10x'd in size and
| they started bringing in $100M+ in management fees. They should
| have been asking themselves if they could responsibly invest
| anywhere near this amount in a crypto market with very few real
| users, but they decided to cash the checks instead.
|
| 2. They used social media to promote these tokens to retail and
| lobbied to reduce barriers for more retail investment. They were
| more than happy to sign off on plans for their portfolio
| companies to sell what were basically securities in seed
| companies to retail investors at orders of magnitude inflated
| prices. Then, they used their own Twitter accounts and podcast
| appearances to play up a potemkin digital revolution and raise
| their next fund, all while retail investors took a bath.
|
| 3. Due diligence was universally awful. They might have avoided
| most of the worst frauds, but plenty of investments were in
| unsustainable mechanisms where the collapse could have easily
| have been predicted.
| yunohn wrote:
| > I haven't seen a shred of evidence that a16z was mass dumping
| tokens
|
| Why do you assume their entire investment was just tokens? No
| other possible way to cash out?
| EGreg wrote:
| It doesn't have to be using tokens.
|
| People like Adam Neumann, Travis Kalanick and Elizabeth Holmes
| were being propped up by VCs long before any ponzi schemes
| adjacent to Web3 appeared.
|
| Venture Capital firms can prop up money-losing economics for
| years (called "reducing friction"), and then dump the stock on
| the public (called "an exit"). By the time the public realizes
| there isn't an amazing business model there, they're the proud
| new owners of stock. Then they proceed to replace the
| management and pressure the new managements to extract rents
| from the ecosystem, endlessly, to justify the expected endless
| growth in stock prices.
|
| If anything, true utility tokens (ones pegged to the dollar)
| can eliminate speculative bubbles, and let the network be owned
| by the participants.
|
| PS: Celsius and FTX and Binance are _not_ in fact decentralized
| protocols. They 're middlemen, the very thing Web3 smart
| contracts were supposed to eliminate. UniSwap, Aave and other
| protocols are chugging along just fine, and the smart contracts
| are NOT capable of rugpulling people. Even Dogecoin and other
| altcoins aren't. Everything is designed to be owned by the
| participants, with no central control. What happened was that
| Ethereum lowered the barrier to creating these smart contracts,
| so we got a lot of crap just like PHP. But it's actually worse
| than that -- opportunists created centralized services where
| you can merely deposit tokens and withdraw them, and that's as
| far as they get when it comes to "Web3".
|
| It's too bad that people blame "Web3" and decentralized
| networks for stuff done by centralized players who build shiny
| interfaces that LARP as a decentralized protocols. It's like
| blaming all gold when banks get robbed, instead of realizing
| the problem is the centralized banks storing your money, not
| the gold itself.
| JumpCrisscross wrote:
| > _Venture Capital firms can prop up money-losing economics
| for years (called "reducing friction"), and then dump the
| stock on the public (called "an exit")_
|
| SPACs come the closest to what you describe. Even there, the
| burden of evidence and disclosure is markedly higher than
| anything in crypto.
| EGreg wrote:
| No, VCs not SPACs. They say "reduce friction" and "fail
| fast". They do multiple rounds injecting capital into
| companies that lose money for years, and sometimes do not
| ever generate any profits or even any revenue. David
| Heineier Hansson and thr Basecamp guys for example have
| railed against this for two decades.
|
| Example of a huge fund now deemed worthless by investors,
| who invested in some of the top Web2 projects (NOT Web3): h
| ttps://www.forbes.com/sites/alexkonrad/2020/04/05/exclusive
| ...
| [deleted]
| codetrotter wrote:
| (November 2022)
| arberx wrote:
| This dude calls Vitalik a scammer. While he might make some good
| points about A16Z, that viewpoint alone ruins his credibility for
| me.
| baby wrote:
| Anybody in Bitcoin at this point has low credibility. The
| innovation space has mostly moved to other chains and projects.
| What is left are non technical people trying to pump the value
| of the coin.
| shrimpx wrote:
| You have it backwards. Bitcoin (and related pure
| decentralized coins) is probably the only thing retaining
| credibility right now. Everything with a CEO, premine, ICO,
| web3, defi, is in question.
| unboxingelf wrote:
| Strongly disagree.
|
| Anybody in any crypto token other than Bitcoin at this point
| has low credibility. Every other chain and project is
| sacrificing decentralization for short term gain. They're at
| best naive and at worst scammers.
| JumpCrisscross wrote:
| Bitcoin is dumb, but it's honest about its dumbness. The
| dumb bits are largely forward looking. Web3 is dumb but
| also fraudulent, because it lies about what it is.
| unboxingelf wrote:
| Bitcoin is boring. It's a decentralized ledger. It's
| effectively the missing protocol for money on IP.
|
| Everything else is a security, by definition.
| manxman wrote:
| I'm glad to see someone dare to call out all of the BS.
|
| People are credibly allowed to question your idols even if you
| don't like it or disagree. ;)
| [deleted]
| yayr wrote:
| well, the ETH project has many sides, one is technology,
| another is coin distribution (especially with a proof of stake
| model). That does not imply a scam, but also is a problem for
| long-term stability
|
| see e.g. here https://cointelegraph.com/news/64-of-staked-eth-
| controlled-b....
|
| or https://www.bitcoin.com/get-started/how-was-eth-initially-
| di...
| unboxingelf wrote:
| ETH had an unfair issuance and is (by design!) centralized
| with a CEO. It couldnt be further from Bitcoin at this point.
| ddorian43 wrote:
| Powell has the wheel now. I'm afraid crypto might be 100%
| ponzi, compared to people saying it's 99% (1% being
| BTC,ETH,etc).
| shrimpx wrote:
| BTC can survive any interest rate/money supply maneuvering
| just like Gold has.
| aardvark179 wrote:
| His attempts in 2013 to get funding for Bitcoin mining using
| quantum computers (and claims they could get similar benefits
| by simulating those computers on classical machines) could at
| best be described as naive and ill informed, less charitably
| described as idiotic, and reasonably described as a scam.
| baby wrote:
| You should read his blog
| manxman wrote:
| The problem is that all the proponents of blockchain have
| conflated technical arguments for decentralisation with lofty
| political ideas for radical social reengineering and have
| been working to pump the blockchain assets to give themselves
| the capital to fight their social agendas. It's all buried in
| plain sight. But the credible ideas are running out and the
| flagrant lack of accountability this time around is kind of
| no different to Socialism 1.0 or Communism 1.0. I look
| forward to being cancelled for having such a viewpoint.
| jongjong wrote:
| The movement was corrupted years ago. The goal of founders
| has been self-enrichment since.
| shrimpx wrote:
| Vitalik and Ethereum Foundation have siphoned hundreds of
| millions (billions?) out of the (pre-mined) Ethereum
| blockchain, which is probably an unregistered security if it
| weren't for high-roller lobbying agains the SEC, and to what
| end? Largely a platform for ICO/NFT/web3 failing Ponzi schemes.
|
| If you know of real-world apps on top of Ethereum, that I could
| use right now on my phone, and is a real thing outside of
| "wallet thing", "mostly-broken web3 version of existing thing",
| "earn 30% interest with defi scam", let me know.
| jongjong wrote:
| True. They've been suppressing innovation intentionally. I
| know because I worked in the space and watched them pull the
| plug on promising projects.
| thegjp210 wrote:
| Not to support A16 - but this reads as classic PR/SEO for the
| extensively quoted "CEO". Below the quality of what I expect on
| HN
| theCrowing wrote:
| [flagged]
| manxman wrote:
| Perhaps, but their backing of Helium alone is makes the
| headline have basis. I mean if you're reading this on a helium
| hotspot somewhere then I will gladly stand corrected but if
| not...
| rexkwondo wrote:
| Chris Dixon rightfully gets a few mentions, but Chris Lyons is
| another a16z GP that has been involved with funding these very
| questionable web3 & NFT projects.
| amalgamated_inc wrote:
| They hinted at this ("our brother the VC") on the All-In podcast
| several times now. Not just this author's opinion.
| s5300 wrote:
| Marc Andreessen is a grifter, ghoul, & all around general POS?
| Color me surprised. Almost like all who make their wealth in a
| certain fashion are.
| mikeyouse wrote:
| I'd be wary about spending any proceeds from any A16Z crypto
| funds if I were an LP.. Given all the renewed focus and
| enforcement, I suspect there will be clawbacks from the obviously
| fraudulent pump-and-dump schemes they supported. I'm pretty
| amazed at the gall of Dixon as well, he is/was just aggressively
| rude to anyone who questioned the utility of any of those
| companies or coins.
| jacquesm wrote:
| But those LPs in turn will have an excellent case against the
| fund managers. The 'L' stands for limited, once they have
| committed their capital to the fund they can't do anything
| about what the fund does with it, they might register their
| protest but they'll have to pony up regardless and if they get
| paid out they might not have sufficient perspective on which $
| came out of which investment (this varies from fund to fund,
| some are very transparent, others less so and funds that re-
| invest or evergreen funds can be even more complicated). LPs
| also don't necessarily live in the same jurisdiction as the
| fund managers or the legal home of the fund.
| defnotahuman wrote:
| It's just so obvious at this point. I remember Justin Kan's
| interview[0] about Web3 and gaming, specifically the idea that
| we'd have NFTs as transferable game assets and instantly thinking
| "how does this guy not know how dead-in-the-water this idea is?"
| You'd need collaboration from studios on a level that would test
| antitrust law in order to make such an idea even remotely
| realistic. Of course he knows better, but hype machine go brrrrr.
|
| 0: https://techcrunch.com/2022/08/08/twitch-founder-justin-
| kan-...
| throwawayjan3 wrote:
| I've enjoyed reading a YC founder named Liron Shapira's Twitter
| threads on a16z Crypto's blatant scams. E.g.
|
| - On Helium: Received $365M in investment, convinced regular
| people to spend $250M buying hotspot nodes in hopes of earning
| passive income. The result? Helium's total revenue is
| $6.5k/month. Link:
| https://twitter.com/liron/status/1551738599254773765?lang=en
|
| - On Axie Infinity: blatant Ponzi scheme disguised as "play-to-
| earn"https://twitter.com/liron/status/1554941450697179136?lang=en
|
| - On a16z's scams in general:
| https://twitter.com/liron/status/1565214131942146051?lang=en
| braingenious wrote:
| Here's my favorite one:
|
| Marc Andreesen gives a rambling non-answer to a simple and
| straightforward question about a web3 use case. It's genuinely
| funny.
|
| https://twitter.com/liron/status/1537186589486460928
| lazzlazzlazz wrote:
| Liron is a known grifter who has been trying to find the right
| thing to complain about, to get online famous, for years. His
| insane past has been discussed before[1]. He's not somebody you
| want to take seriously or cite as a source.
|
| [1]:
| https://twitter.com/joshsojoshsoj/status/1554139329643122688
| [deleted]
| pbiggar wrote:
| Certainly, their relentless fervor for crypto has destroyed the
| reputation of a16z, though it made them a lot money, and it
| remains to be seen if there will really be any repercussions for
| them.
|
| In a country with a functioning regulatory system, the partners
| would be looking at jail time for their involvement in these
| scams, but I suspect they'll come out of this just fine.
| rubyist5eva wrote:
| All cryptocurrencies are a scam and any supposed benefits are an
| illusion. Pot, meet kettle.
| Nextgrid wrote:
| Crypto _currencies_ are the only part of blockchain
| /crypto/web3 that's actually not a scam. They do work if you
| treat them as a means of transmitting money, although they do
| make many trade-offs to be trustless, private and censorship
| resistant which means that in practice they are an inferior
| alternative to fiat currencies & traditional finance if you
| have the option to use those, so the only legitimate use that
| remains is either grey area/unlawful transactions or legal
| transactions in locations where traditional payment rails do
| not exist or are outdated.
|
| The problem is all the "utility" tokens and other bullshit in
| the crypto/web3 space. None of that is required to operate a
| legitimate business in the real world, should there be an
| actual, sustainable business behind it. But the truth is that
| there's no business and the whole crypto/blockchain/web3
| concept is used as a smokescreen to conceal that fact and be
| able to make off with the gains of the underlying Ponzi or pump
| & dump.
| rubyist5eva wrote:
| > although they do make many trade-offs to be trustless,
| private and censorship resistant which means that in practice
| they are an inferior alternative to fiat currencies &
| traditional finance if you have the option to use those, so
| the only legitimate use that remains is either grey
| area/unlawful transactions or legal transactions in locations
| where traditional payment rails do not exist or are outdated
|
| Is this supposed to be an argument _for_ cryptocurrencies,
| because this sounds like one that shows why they are a scam.
| jpgvm wrote:
| It doesn't show they are a scam. It shows they are useless
| to most people because fiat does what most people need,
| just better.
|
| Crypto has actual use cases, just those use cases usually
| revolve around not being able to trust your counter-party,
| access to easy laundering systems or access at all when
| access to fiat is denied.
|
| This leaves you with the very healthy of set of potential
| users being those oppressed by nation states, criminals and
| adult industries and maybe some variations on these that I
| can't think of right now.
|
| So not a scam, just mostly useless and when it's not
| useless probably attracts unwanted attention vs fiat
| physical cash.
| paxys wrote:
| "All of these crypto startups promoted by A16Z are scams. But
| mine is totally legit, I promise."
| unboxingelf wrote:
| Swan provides a marketplace for buying and selling Bitcoin and
| Bitcoin only. So yeah, I'd agree with the quote.
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