Putting the 'block' in blockchain
Hello and welcome to Protocol | Fintech! This Tuesday: the Web3 fight continues, Tencent buys in to Monzo, and Check’s CEO on fintech infrastructure.
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.
A version of this story appeared on Protocol.com.
A MESSAGE FROM MASTERCARD
59 million Americans work outside the traditional employer benefit system - and more and more are moving away from that model as the gig economy grows. People, during the pandemic, are taking a step back and thinking about the traditional job setting and asking: ‘Is this what I want to do?’
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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.
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.
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.
A MESSAGE FROM MASTERCARD
A shift in the way health insurance and benefits are handled has helped free workers from unfavorable working conditions and unlocked opportunity for the millions of gig workers entering the labor market. In October 2020, Mastercard and Stride Health partnered to bring portable benefits to gig and independent workers.
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.
Thanks for reading — see you Friday!