Internet Squared - Andy Tang, Managing Partner, Draper Dragon
**What happened in 2017? **
- Yes, financial services but also many other industries.
- ICOs raised 6-7 times more than equity
- Cryptocurrency up 2900%
- SEC published ICO guidance abd began charges against fraudulent ICOs
- China shuts down exchanges
- Japan declares Bitcoin legal currency
- 10m bitcoin wallets created
What will happen in 2018
- Perez Technological Surge Cycle -
- crypto 18 is either internet 97 or 99
- Most internet uses will be transformed in 10 years - social media, insurance, music, etc
- Blockchain is turning lead into gold
Tim Draper’s Opening Video
Did not happen LOL
Charlie Lee, founder of Litecoin
Problem
- Currently no fee market
- hard for SPV clients to calculate fees
- Developers ser min fees
- supply/demand determines the fee
- only buyer side fee signaling
- Mining side cannot signal fees
- SPV don’t have transaction history. Need to rely on third parties
- LTC fee when from $0’01 to $0.10 per transaction
Solution
- let minerset min accepted fee
- Use 5 of theversion bits
- Miner fee signaling
- Miners have incentive to keep fees high
- If set too high, leave money on table
- SPV clients cab estimate median min fee of last X blocks
- There are some potential problems (child pays, out of band payments, miners gaming system)
Lee putting out proposal for Litecoin soon.
Lee does not really buy into proof of stake. Security is different and not as good as proof of work. Money censorship is big problem tackled by bitcoin and Litecoin. Other coins may not need the same level of security provided by proof of work.
Purpose of Litecoin is be silver to Bitcoin’s gold. One currency does not fit all. Decentralization and security vs fees and throughput is always the trade off with crypto. Litecoin is less decentralized and less secure but lower fees and greater throughput.
Draper video remarks - Review of 2017. Amazing things happening. Got interested in digital goods. Saw that Bitcoin was going to transform finance. Will transform society, geographic boundaries will fall, countries will need to compete with each other. Next couple years may be rocky. Tech will change everything. We will see bigger change than the Internet. Favorite projects will tie to days, accounting, smart contracts. Things will be more efficient SF effective. Don’t require a huge drag of trusted third party.