I read with interest Erin Griffith’s essay in the Fortune Data Sheet newsletter this week, which contained this paragraph:
“I recently found myself carelessly repeating a statistic that I’d heard dozens of times in private conversations and on public stages: “Nine out of 10 startups fail.” The problem? It’s not true. Cambridge Associates, a global investment firm based in Boston, tracked the performance of venture investments in 27,259 startups between 1990 and 2010. Its research reveals that the real percentage of venture-backed startups that fail—as defined by companies that provide a 1X return or less to investors—has not risen above 60% since 2001. Even amid the dotcom bust of 2000, the failure rate topped out at 79%.”
A ha! On the one hand, better. But on the other, we’ve been misled. Although, as Erin points out, the actual numbers aren’t that important. The message – that it’s much, much harder than it seems – is.
— x —
The Digital Trade Chain Consortium, comprised of seven European banks working on blockchain supply chain applications for small and medium businesses (SMEs), has partnered with IBM for the roll-out of the platform, still scheduled for the end of 2017.
While not exactly shattering news, it does show that progress is being made, that the project is still on schedule, and that we might soon see a live version of a blockchain platform helping foster trade across borders. That is exciting.
— x —
Forbes published a thought-provoking article on bitcoin, which the author argues has no clear intrinsic value.
He clarifies that its utility as a medium of exchange can’t be considered intrinsic value, either, unlike gold, and posits that its “political value” can’t be substituted.
What he neglects to include in the analysis is that bitcoin has another utility, one coming increasingly to the fore – the ability to transfer information without going through third parties. That information may be about a transaction (Alice pays Bob 0.5 bitcoins), or it may be a hashed document registered on the bitcoin blockchain. That function – bypassing centralized enablers in a reliable and tamper-proof fashion – has value.
So, even if you believed that bitcoin had no use whatsoever as a currency, it’s hard to argue that it has no intrinsic value.
I also disagree that the “political value” is worthless. In this increasingly politicized world in which we live, with tectonic shifts in economics, demographics and philosophy, it really isn’t.
And the claim that all libertarians want to return to the gold standard is a stretch.
As is his claim that a large part of bitcoin’s value stems from the ability to mine it. Apart from the fact that not everyone can do that (it’s bloody expensive), mining has nothing to do with utility or, for that matter, intrinsic worth. Just because we can create something, doesn’t mean it has value. It only has value if people want it.
Why would people want it? Because they believe it will be useful. Maybe not today, but some day.
How is that different from the value we ascribe to the dollar? It has value because we believe that the US government will honour its debt and repay it. In other words, the dollar will be useful. Not today, but some day.
— x —
As a devout city-enthusiast, seeing a travel photo competition (for National Geographic, no less) full of stunning images of buildings makes me so happy… (via MyModernMet)