We need to act now to protect investors and the global financial marketplace from the severe risks posed by crypto-assets and must not be distracted by technical obfuscations which mask an abject lack of technological utility. We thank you for your leadership on financial technology and regulation and urge you to consider our objective and independent expert judgments to guide your legislative priorities, which we remain happy to discuss anytime.
A lot has changed in the state of crypto since we started investing in the area nearly a decade ago.This report is the first of what will be an annual overview of trends in the crypto industry, shared through the a16z crypto vantage point of both tracking data and across the countless entrepreneurs and builders we meet. It’s for anyone who seeks to understand the evolution of the internet, and where we are on the journey towards a decentralized, community-owned-and-operated alternative to the centralized tech platforms of web2 – especially as it touches creators and other builders.The top themes are distilled into five summary takeaways below, but be sure to dig into these 50+ slides (full deck for the 2022 State of Crypto Report available for download below); be sure to also sign up for the a16z crypto newsletter to continue getting insights as well as updates about upcoming resources.5 key takeaways#1 We’re in the middle of the fourth ‘price-innovation’ cycle
Who should I trust with my data? are decentralised technologies the answer to achieving ethical and lawful data governance practices?
Source: PROTECT Think-In Resources
We need to foster trust in social scienceThese insights are not new. But unfortunately they run against the grain of current systems and incentives for academic impact, which focus on identifying outcomes produced by individual research groups or pieces of research.This means that social scientists are not sufficiently recognised or rewarded by their institutions or research communities for media engagement, relationship-building, or for joining up and communicating bodies of research (beyond their own). This implies the need for a rethink of how we value and reward engagement: we need to adjust models and incentives to encourage practices that foster trust in social science.
How could we possibly trust what we don’t understand?Now that we’re automating things where we couldn’t have handcrafted that model (recipe/instructions) — because it’s way too complicated — are we seriously expecting to read it and fully grasp how it works? A recipe with a million boring items is something that a computer can remember easily, but it will overwhelm your limited human memory capacity.
Mitigating the negative externalities and existential risks posed by miner-extractable value (MEV) to smart-contract blockchains.
Cybercriminal gangs laundered an estimated $8.6 billion worth of cryptocurrency last year, in 2021, a 30% rise from the previous year, according to a Chainalysis report published today.
At best, the investors and exchanges are people who want to reinvent finance but are underestimating its complexity. As Matt Levine says, a lot of crypto is simply repeating financial history’s mistakes. At worst, it’s rich guys teaming up with their buddies to exploit a bubble and help them buy $100 million dollar mansions. It’s time these big companies and regulators stepped to make sure the same standards and data are available to everyone. Until then, buyer beware.
Palmer, the California artist, says sometimes he gets dozens of alerts a day from DeviantArt that his work is being sold without his permission on OpenSea.Last year, he successfully petitioned OpenSea by email to take down some auctions of his work.But, in recent weeks the platform has been requiring artists submit a Digital Millennium Copyright request, the formal legal mechanism for copyright owners to ask that their work be taken off a hosting platform, Palmer said.”I’ve given up submitting these requests, it’s just too time consuming,” he said.Artists like Palmer want platforms like OpenSea, which was recently valued at $13 billion, to invest more in proactively ensuring artists’ work isn’t ripped off.Some have given up petitioning OpenSea and have started submitting their complaints directly to Google, which hosts the images on OpenSea’s auctions.The OpenSea spokesperson said in a statement that the company is scaling its efforts “across customer support, trust and safety, and site integrity so we can move faster to protect and empower our community and creators.”James Grimmelmann, a professor of digital law at Cornell Law School, said as long as the NFT platforms are responding to complaints from copyright holders, they are operating within the law – even if scammers are running rampant.Grimmelmann said NFT marketplaces are facing the same thorny issue that the older generation of internet platforms is still grappling with: how to fairly moderate online content at a massive scale.”NFTs don’t solve this problem,” he said. “These platforms are just the latest to discover how hard that really is.”
The thirty-year-old pilot whom I had observed thought that the autonomy “was cool,” but he paddled off even when his plane had the potential to achieve a good offensive angle. “I wanted to basically figure out my limits with the A.I.,” he told Woodruff. “What is too conservative, and what is going to get me killed. And then find that happy medium.”Schnell’s graduate student, who can’t be named because he’s on active duty in the military, came over to listen to the debriefing. “You would be the perfect example of someone we’d need to influence, because—and I do not mean this to be rude at all—you completely violated the construct of the experiment,” he told the pilot. “You were deciding to not let the A.I. do the job that it’s put there to do, even though it was actually performing fine in the sense of not getting you killed. If we want to make you a battle manager in thirty years, we’d need to be able to push that behavior in the opposite direction.”