It is no secret that Andreessen Horowitz is bullish on crypto: The firm isn’t just boasting about having started investing in the space a decade agobut it also debuted a $4.5 billion web3 fund last week.
To understand the upward move of a16z, despite what others call “crypto winter,” it is 2022 State of Crypto Report is a good start. According to its disclaimers, the document is not directed at investors or potential investors – yada, yada, yada. But it reads like an argument for crypto, DeFi, NFTs and all things web3.
The problem, in my view, is that the report’s authors, who are all part of the a16z team, are overstating the current opportunity for crypto. In doing so, they make it sound bigger than it is – and it can take years to get to that point.
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It’s understandable that the report is bullish on crypto. After all, if you want to put billions of dollars in funding into a market, you’re not even alone, the TAM must be up to date. However, the report is also intended to be an overview of trends, so it seems questionable to point to opportunities that are not yet real.
The issue that bothered me the most has to do with remittances – money sent by individuals across borders, typically from a richer country to a poorer one. The World Bank expects such annual inflows Reach $630 billion in 2022. And yes, there are inefficiencies and fees along the way. For the authors of the a16z report, that is more than enough to list remittances as a case for DeFi.
But are remittances and money transfers really ripe for crypto disruption? And is DeFi really the right solution to help what the report describes as a “huge chunk of the world.” [ … ] underserved by existing financial institutions”? This is definitely not what I hear from practice – as also confirmed by two founders I contacted Tomas Bercovich out Global66 and Ryan Newton out Paisa.
No thank you
Earlier this month I was in the audience at the Tech.eu Summit when Wise CEO Kristo Käärmann was interviewed on stage. “Currently, Wise does not accept cryptocurrencies. Do you think,” asked Bloomberg’s Ivan Levingston, “that this could ever change?”
That is a recurring question for the fintech company, so Käärmann was careful not to sound dismissive. “I’m very excited about the technology,” he said, adding that “interesting experiments are happening all over the world.” But the core of his answer was still a nail in the crypto coffin. “We’re just looking for a use case,” he said. “We are looking for the problem that we can solve with it.”
For remittances, crypto is still a problem looking for a solution – TechCrunch Source link For remittances, crypto is still a problem looking for a solution – TechCrunch