Putting the 'block' in blockchain

What’s gotten into Marc Andreessen?

Jack Dorsey, apparently. A feud between the two tech titans that started before Christmas is still going strong in 2022. The creator of the Netscape browser (a hero of Web 1.0) and a co-founder of Twitter (a paragon of Web 2.0) sparring like teenagers on Reddit over the meaning of “Web3” would be an amusingly petty spectacle if there weren’t billions of dollars and the future of an industry at stake.

Dorsey started it. On Dec. 20, he tweeted: "You don't own 'web3.' The VCs and their LPs do."

• That was an obvious dig at Andreessen Horowitz, which has arguably been the most aggressive of the old-line venture capital firms in embracing crypto. It announced it had raised a $2.2 billion crypto fund in June.
• It caught a lot of Dorsey’s followers by surprise, since the Block CEO has not been shy about his embrace of bitcoin (it’s even in his Twitter bio). Dorsey seemed to be drawing a line between bitcoin, a cryptocurrency he’s said he hopes will bring about “world peace,” and other blockchain creations.
• Andreessen’s initial response was subtle enough: He blocked Dorsey. Andreessen’s infamous for having a twitchy “block” finger, but the snub wasn’t lost on Twitter’s creator, who shared a screenshot of Andreessen’s blocked profile, quipping, “I’m officially banned from Web3.”

That set Andreessen off. “In 2022, I am GOING TO BLOCK SO MANY PEOPLE,” he declared in a Jan. 1 tweet featuring a meme of J-Lo and Ben Affleck.

• It was hard not to read it as a gleeful jab at Dorsey, the CEO of Block (this is now officially awkward). He continued with a “call for startup pitches” for a "block button, but for real life."
• Andreessen used to be a bit of a Dorsey fanboy. His firm was so eager to invest in Twitter that it bought shares on the secondary market when it couldn’t get in on a regular round. At one point, Andreessen said his sole investing regret was not investing in Square (now Block). His ardor seems to have cooled.
• Others saw hypocrisy in Dorsey’s anti-VC stance. Dorsey attempted to explain the apparent contradiction: “ I’ve learned from the issues taking on VCs creates. Block *had* help from VCs yes. But ones that know their place.”
• As Andreessen continued to spew memes about blocking on Twitter — one of which suggested people he had blocked weren’t even human — a follower responded: “I'm sure either Marc is high or his account [was] hacked or maybe he's just turned into [us teens].”

This is not a good look for anyone. Dorsey comes off as flippant, and Andreessen thin-skinned and immature.

• Public feuds like this are rare in Silicon Valley. You never know when you might need a VC to help clean up a cap table to grease the skids for an acquisition, or who might end up as your co-investor. (Dorsey was an angel investor in Instagram, to which Andreessen Horowitz contributed seed funding.)
• What happens if Block wants to buy an a16z-funded company, or collaborate on a blockchain technology its massive crypto fund has backed?
• Maybe the prospect of a16z flexing its crypto muscles just proves Dorsey’s point. On Monday, he cryptically tweeted: “Centralization begetts [sic] different centralization.” (Side note: Twitter still needs an edit button!)

The upside is that Dorsey and Andreessen revealed a growing cultural rift in the crypto movement. Crypto-utopians like Dorsey are fixated by the sociocultural implications of new technologies. Financiers like Andreessen are more interested in the money to be made in the transition. If this were a blockchain project, we’d just fork things and move on. But life is messier than that.

— Ben Pimentel (email | twitter) and Owen Thomas (email | twitter)

A version of this story appeared on Protocol.com.

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From Protocol | Fintech

Crypto payments will definitely, maybe, possibly go mainstream in 2022. Consumer and merchant education, regulatory questions and the state of fiat-crypto onramps are still roadblocks.

IPOs set records in 2021, but there are more teed up for 2022. Stripe is on the top of bankers’ wishlists.

Coming up

Protocol | Entertainment launches today. Our colleagues Janko Roettgers and Nick Statt are going beyond the buzzwords to report in depth on the future of the internet and entertainment as we know it. Sign up here to get it in your inbox every Tuesday, Thursday and Friday.

Overheard

“Politicians here have had an outdated perception of digital assets at a crucial time when the blockchain technologies used for cryptocurrencies, NFTs and the metaverse, are advancing rapidly day after day.” —South Korean lawmaker Lee Kwang-jae on his plans to accept campaign donations in crypto.

“It’s like the dot-com bubble. Ninety-nine point nine percent will be gone. But those that survive will become the Googles of the world.” – Former world chess champion Garry Kasparov on the future of bitcoin and other cryptocurrencies.

3 questions with Andrew Brown, founder & CEO of Check

What fintech trend are you most excited about?

The number of infrastructure-first companies making our financial system more accessible to developers is incredibly exciting to me. Payments was the big focus over the past few years, but now you’ve got companies focused on almost every aspect of financial services, whether that be banking, lending, trading or (as in Check’s case) payroll.

What problem would you like to see a fintech company solve?

It’s probably too big a problem for any one company to solve, but the antiquated payment rails in this country still drive me crazy on a daily basis. The ability to debit from one account and credit to another across financial institutions with instant settlement is still a distant dream, when it should be a reality.

What's your advice to younger technologists who want to build a career in this field?

Pursue your curiosity. Tech is a field that favors the young because you’re often able to see the future more clearly, unburdened by what has and has not worked in the past. Use that to your advantage and go deep on the technologies and problem areas that interest you. You’ll be surprised by how quickly you can become an expert in many areas.

Need to know

Tencent has taken a stake in Monzo. The Chinese gaming and social media giant has reportedly invested $100 million in the British neobank now valued at $4.5 billion.

EToro’s valuation was slashed to $8.8 billion. The online brokerage is set to go public via a SPAC merger with the Betsy Cohen-backed Fintech Acquisition Corp. V, which has reduced the company’s valuation from $10.4 billion.

Making moves

Sarah Bloom Raskin may be Biden’s pick for the Federal Reserve. The White House is said to be eyeing the former Fed governor and Treasury Department official as one of three nominees for the central bank board seats.

FDIC Chair Jelena McWilliams resigned. Williams, who was appointed by President Trump and was known to clash with Democratic members of the FDIC board, said her resignation would be effective Feb. 4.

Deal flow

Addi raised $200 million in equity and debt funding. The Latin American “buy now, pay later” company secured $80 million in equity financing from investors that included GIC Private Ltd. and SoftBank. It secured $125 million in debt financing, primarily from Goldman Sachs.

Jupiter raised $86 million. The Bangalore-based neobank’s series C round was led by Tiger Global, QED and Sequoia Capital India.

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Data point

207.53 exahashes per second: That’s the bitcoin network’s new all-time high hashrate, a measure of how many miners are involved in managing the network and how secure it is, reached on Saturday.