Counterpoint on Venture Capital

My personal experience working with VCs was very positive, but it was (a) a long time ago and (b) they were top-flight firms (Sutter Hill and Sequoia). I've been very skeptical of the current state of the VC industry in Venture Capital Isn't Working and Venture Capital Isn't Working: Addendum. Steven J. Dubner's Is Venture Capital the Secret Sauce of the American Economy? presents a far more optimistic view, as does The Economist's The bright new age of venture capital. On my side of the argument are Fred Wilson's Seed Rounds At $100mm Post Money and the Wall St. Journal's The $900 Billion Cash Pile Inflating Startup Valuations.

Below the fold, some discussion of these opposing views.

Blockchain Gaslighting

In Web3/Crypto: Why Bother? Albert Wenger draws an analogy between the PC and "web3" as platforms for innovation:

The late Clayton Christensen characterized this type of innovation as being worse at everything except for one dimension, but where that dimension really winds up mattering a lot (and then over time everything else gets better also as the innovation is widely adopted).

The canonical example here is the personal computer (PC). The first PCs were worse computers than every existing machine. They had less memory, less storage, slower CPUs, less software, couldn’t multitask, etc. But they were better at one dimension: they were cheap. And for those people who didn’t have a computer at all that mattered a great deal.
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A blockchain is a worse database. It is slower, requires way more storage and compute, doesn’t have customer support, etc. And yet it has one dimension along which it is radically different. No single entity or small group of entities controls it – something people try to convey, albeit poorly, by saying it is “decentralized.”

Below the fold I explain why this is typical blockchain gaslighting.

DMCA To The Rescue!

In NFTs and Web Archiving I pointed out that the blockchain data representing an NFT of an image such as this CryptoPunk is typically a link to a Web URL containing metadata that includes a link to the Web URL of the image. That post was about one of the problems this indirect connection poses, that since both the metadata and the data are just ordinary Web URLs they are subject to "link rot"; they may change or vanish at any time for a wide variety of reasons.

I Confess To Right-Clicker-Mentality discusses another of the problems this indirect connection causes, namely that trying to create "ownership", artificial scarcity, of an image represented by a Web URL is futile. Anyone can create their own copy from the URL. Miscreants are now exploiting en masse the inverse of this. Because art images on the Web are URLs, and thus easy to copy, anyone can make a copy of one and create an NFT for it. No "ownership" of the image needed. Liam Sharp suffered this way:

Sadly I'm going to have to completely shut down my entire @DeviantArt gallery as people keep stealing my art and making NFTs. I can't - and shouldn't have to - report each one and make a case, which is consistently ignored. Sad and frustrating. pic.twitter.com/oNH6yXQtyU

— Liam 'Sharpy' Sharp (@LiamRSharp) December 17, 2021

Yet another externality of cryptocurrencies!

Follow me below the fold for an explanation of how the DMCA was used to fix the problem.

Bitcoin vs. Madoff

Robert McCauley explains Why bitcoin is worse than a Madoff-style Ponzi scheme and it is a must-read. Below the fold, discussion of some of his key points.

Progress On DNA Storage

In 2018's DNA's Niche in the Storage Market, I addressed a hypothetical DNA storage company's engineers and posed this challenge:

increase the speed of synthesis by a factor of a quarter of a trillion, while reducing the cost by a factor of fifty trillion, in less than 10 years while spending no more than $24M/yr.

Figure 2C

Now, Scaling DNA data storage with nanoscale electrode wells by Bichlien H. Nguyen et al shows that the collaboration between Microsoft and U. Washington has made significant progress toward this goal. Their abstract reads:

Synthetic DNA is an attractive medium for long-term data storage because of its density, ease of copying, sustainability, and longevity. Recent advances have focused on the development of new encoding algorithms, automation, preservation, and sequencing technologies. Despite progress in these areas, the most challenging hurdle in deployment of DNA data storage remains the write throughput, which limits data storage capacity. We have developed the first nanoscale DNA storage writer, which we expect to scale DNA write density to 25 × 10⁶ sequences per square centimeter, three orders of magnitude improvement over existing DNA synthesis arrays. We show confinement of DNA synthesis to an area under 1 square micrometer, parallelized over millions of nanoelectrode wells and then successfully write and decode a message in DNA. DNA synthesis on this scale will enable write throughputs to reach megabytes per second and is a key enabler to a practical DNA data storage system.

Below the fold I discuss the details.

Blatant Self-Promotion

Liam Proven's NixOS and the changing face of Linux operating systems is a very interesting discussion of Linux distros and package management. He starts by discussing radical restructuring of Linux distros, focusing on NixOS and GoboLinux. Then he looks at less radical alternatives:

So, instead of re-architecting the way distros are built, vendors are reimplementing similar functionality using simpler tools inherited from the server world: containers, squashfs filesystems inside single files, and, for distros that have them, copy-on-write filesystems to provide rollback functionality.

The goal is to build operating systems as robust as mobile OSes: periodically, the vendor ships a thoroughly tested and integrated image which end users can't change and don't need to. In normal use, the root filesystem is mounted read-only, and there's no package manager.

Proven goes on to discuss efforts along these lines at Red Hat, openSUSE, Canonical and EndlessOS.

If you don't blow your own horn, who will do it for you? So it falls to me to point out that this is a great, but rather tricky, idea that I have implemented versions of not once, but twice. The first time more than 30 years ago for SunOS 4.1 in prototype form at Sun Microsystems, and the second time nearly twenty years ago for OpenBSD in production for the LOCKSS Program at Stanford.

Below the fold is more detailed self-promotion.

Talk at TTI/Vanguard Conference

I was invited to present to the TTI/Vanguard Conference. The abstract of my talk, entitled Can We Mitigate Cryptocurrencies' Externalities? was:

Bitcoin is notorious for consuming as much electricity as the Netherlands, but there are around 10,000 other cryptocurrencies, most using similar infrastructure and thus also in aggregate consuming unsustainable amounts of electricity. This is far from the only externality the cryptocurrency mania imposes upon the world. Among the others are that Bitcoin alone generates as much e-waste as the Netherlands, that cryptocurrencies enable a $5.2B/year ransomware industry, that they have disrupted supply chains for GPUs, hard disks, SSDs and other chips, that they have made it impossible for web services to offer free tiers, and that they are responsible for a massive crime wave including fraud, theft, tax evasion, funding of rogue states such as North Korea, drug smuggling, and even armed robbery. In return they offer no social benefit beyond speculation. Is it possible to mitigate these societal harms?

The text with links to the sources is below the fold.