With the recent talk of reddit being cannibalized by bitcoin technology, I thought it a good time to post something I’ve been thinking about for a while. Could a completely decentralized startup one day rival the likes of Google, Facebook and Amazon?
Within the bitcoin world there’s a common understanding that the most valuable thing about bitcoin is not the monetary currency but the underlying “blockchain” technology that the bitcoin currency runs on. For those unfamiliar, you can check out three heavily-funded ventures creating infrastructure that would enable anyone to program applications on the blockchain that go way beyond monetary currencies: Ethereum,Swarm and Blockstream.
One such application is what’s known as a “Distributed Autonomous Organization,” which is an organization like a corporation, government or NGO, but which has no central leadership and uses internet technologies to organize and function. Examples of DAOs that you are familiar with include open-source software systems like Linux; terrorist organizations like Al Qaeda; communities like Anonymous; and …
Prior to the mid-19th century, those who could not pay their debts were routinely tossed into prison. Actually, you can still go to debtor’s prison in Germany, Greece, China and Dubai. In the United States, two of the signatories to the Declaration of Independence (James Wilson and Robert Morris) were incarcerated for their unpaid debts. In theory, the U.S. abolished such practices in the 1830s. But six states still allow you to be arrested and detained indefinitely until you “work it out” with your creditors.
And while we humans seem to have a visceral negative reaction to welshers, our disdain for bad faith lenders goes deeper. Condemnation of usury dates back to the Vedic texts in ancient India, and is condemned as well in all the other major religious texts in the world. Islamic law (Sharia) prohibits the charging of interest at all, and considers the practice to be one of the seven heinous sins, right up there with murder and “unlawfully taking an orphan’s …
- Startups add an average of 3 million jobs in their first year, while older companies lose 1 million jobs annually. (ref)
- Without startups, job growth in the US would be negative 1.2 percent. (ref)
- Angel investments created 370,000 U.S. jobs in 2010, nearly half of the private sector jobs created that year. (ref)
- 265,400 individuals provided $20.1B in angel investment capital to a total of 61,900 entrepreneurial ventures in 2010. (ref)
- In contrast, the private equity industry invested $180B in 2010. (ref)
- Historically, angels invest $50B per year into 50,000 companies, representing 70% of capital for new ventures; 11 times more than the amount provided by Venture Capitalists. (ref)
- The long-term historical return of the U.S. Angel market is 27% annually, three times higher than the public stock market. (ref)
- Warren Buffett’s historical return is 24% annually. (ref)
- Venture Capital historical returns are around 20%, but over the