Saturday, November 26, 2016

Why the FT's Izabella Kaminska Won't Be Invited to the Andreessen-Horowitz Christmas Party, Redux

The November 23 headline at Quartz reads:
Bitcoin and blockchain seem more and more like solutions looking for a problem
And I was struck by a couple thoughts. The first was:
"Hey! I've already appropriated that formulation for this context!"
And the second was "Oh good grief, did I appropriate it from Izabella herself?"

So I asked Google for 'Kaminska "solution in search of a problem"' and it coughed up ten hits, two of which were Climateer Investing posts from September--links below--and the top one:
Bitcoin is a solution looking for a problem - Financial Times
May 8, 2015 - Sir, Congratulations to Izabella Kaminska on skewering the bitcoin phenomenon ... Bitcoin looks like a solution in search of a problem, and an ...
from the FT.

I didn't recall seeing that article but it's possible I did and failed to note it, something we really try to avoid and if I did so fail, I sincerely regret the error.

Here's the story from Quartz, Nov. 23:

Bitcoin and blockchain seem more and more like solutions looking for a problem
The bitcoin and blockchain world is in a bit of an investment slump.

Venture money flowing into startups working on cryptocurrencies or the technical principles underpinning them, generally known as blockchain technology, is getting harder to come by, according to data from trade publication CoinDesk. “It really seems like we’re in a slow phase with bitcoin and blockchain right now where people are mainly building infrastructure,” says Zavain Dar, a venture capitalist at Lux Capital who has taught classes on cryptocurrency at Stanford and has invested in Blockstream, one of the biggest companies in the sector.

What’s more, efforts to adapt blockchain tech to replace legacy financial systems by the world’s biggest banks seem to be hitting roadblocks. This week saw the departures of Goldman Sachs and Santander from one of the highest-profile attempts to create a consortium of financial institutions to work on the technology, called R3CEV.

It seems that both risk-loving venture capitalists and generally risk-averse banks are dialing back their investment in a technology that was supposed to change the world—but hasn’t, as Timothy B. Lee at Vox has pointed out.

Startups working on blockchain tech have raised $376 million so far this year, which is 17% less than the amount raised over the same period last year, according to CoinDesk’s latest quarterly research report. Funding declined every quarter in 2015, in stark contrast to three quarters of successive growth the previous year.

Even as bitcoin had a slow 2015—both in terms of VC interest and its price—a wave of interest took hold of the world’s biggest financial institutions who saw blockchain tech as the key to increasingly expensive regulatory demands and outmoded infrastructure. Here was a way for banks to increase transparency, cut costs, and appear to be on the bleeding-edge of technology while doing so.

Yet the blockchains in service of banks haven’t produced a revolution, either. Most firms appear to be either paying lip service to talk of innovation or are reluctant to commit more than a sliver of resources to experimenting with the technology. As Simon Taylor, the former blockchain lead at Barclays in London and now a co-founder of fintech consultancy 11FS, has pointed out, there are a lot of the same old proofs-of-concept floating around, and few, if any, production-ready software systems....MORE
HT to naked capitalism who wrote:
Bitcoin and blockchain seem more and more like solutions looking for a problem Quartz (Richard Smith).
 I’ve said this sort of thing to Richard privately….wish I’d had enough trust in my gut (based on looking a lot of whiz-bang tech deals that never developed a product customers would buy) to have said that officially. But the Mighty Wurlitzer of Hype can seem very convincing. But I have said repeatedly that I think the bitcoin/blockchain advocates are looking for it to replace existing products and services (like bitcoin replacing existing payment systems), which was the same mistake microwave oven manufacturers made. They spent the better part of two decades pushing it as a substitute for conventional ovens, when it was clearly inferior (you can’t brown meats or bake with a microwave, for starters). Only when they figured out its best use was as a dedicated rapid heating device did it find a receptive market
Funny thing about naked capitalism, she was just smeared by the Washington Post as being part of a Russian intelligence propaganda operation.
But first, back to me.

On Sept. 8 we posted "Fintech: 'Blockchain's Numbers Don't Add Up'":
The developers have to somehow get out of the 'solution in search of a problem' mentality but trying to change human nature is much more difficult than writing code....
And a couple weeks later, the progenitor of today's headline:

Insurance: The FT's Izabella Kaminska Will Probably Not Be Going to This Year's Andreessen-Horowitz Christmas Party
Last year, when Ms. Kaminska was pointing out* that Andreessen-Horowitz investee 21inc. ($116 mil from A-H, Khosla et al) seemed to be another solution-in-search-of-a-problem company, I was reasonably sure she wouldn't be invited to the 2015 party.
Now this latest pretty much rules out her attending the 2016 get-together as well.

First some background....
Anyhoo, two more thoughts come to mind:

1) I really wonder what happened to 21inc., and

2) Ms. Kaminska was right, right, right.

It's enough to give journalism a good name.

And now the naked capitalism story, from naked capitalism:

Washington Post Promotes Shadowy Website That Accuses 200 Publications of Being Russian Propaganda Plants
Yves here. As indicated in Links, we’ll have more to say about this in due course. Note, however, that as Blumenthal points out, some of the sites that are listed as PropOrNot allies receive US government funding. As Mark Ames pointed out via e-mail, “The law is still clear that US State Dept money and probably BBG [Broadcasting Board of Governors of Voice of America-Climateer] money cannot be used to propagandize American audiences.” So if these sites really are “allies” in terms of providing hard dollars or other forms of support (shared staff, research), this site and its allies may be in violation of US statutes.
By Max Blumenthal, a senior editor of the Grayzone Project at AlterNet, and the award-winning author of Goliath and Republican Gomorrah. His most recent book is The 51 Day War: Ruin and Resistance in Gaza. Follow him on Twitter at @MaxBlumenthal. Originally published at Alternet

shady website that claims “Russia is Manipulating US Opinion Through Online Propaganda” has compiled a blacklist of websites its anonymous authors accuse of pushing fake news and Russian propaganda. The blacklist includes over 200 outlets, from the right-wing Drudge Report and Russian government-funded Russia Today, to Wikileaks and an array of marginal conspiracy and far-right sites. The blacklist also includes some of the flagship publications of the progressive left, including Truthdig, Counterpunch, Truthout, Naked Capitalism, and the Black Agenda Report, a leftist African-American opinion hub that is critical of the liberal black political establishment....MORE
It's enough to give journalism a bad name.