Technology

Investing in initial coin offerings, or ICOs, is a minefield. This isn&t just true for people with absolutely no technical background but also for many investors who may be well-versed in tech but still struggle to understand many projects& white papers.

Enter TruStory, a platform for users to research and validate claims that people make online, whether in a blog post, white paper, website or social media post. The young companyaim is to &bring authenticity back into the digital and decentralized world.&

Ita huge and growing opportunity. Though regulators around the world are cracking down on cryptocurrency fraud, the number of ICOs has skyrocketed and the funds raised through the mechanism are increasing. According to data collected last month by CoinDesk, ICOs raised $6.3 billion in the first three months of 2018; that118 percent more than projects managed to raise by way of ICOs in all of 2017.

Itnot just blockchain-startups that are carrying out ICOs, either. Many other types of companies are trying to use them — and many of them are frauds.Just last week, The Wall Street Journal published ananalysis of 1,450 cryptocurrency offerings, in which the outlet found &271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.&

Separating the wheat from the chaff is a tall order, but investors are willing to bet that TruStory can do the sorting.The outfit just raised $3 million in seed funding led by True Ventures with participation from Pantera Capital, Kindred Ventures, Homebrew, Coinbase Ventures, Wonder Ventures, Abstract Ventures and former TechCrunch co-editor Alexia Tsotsis through her new fund Dream Machine.

The round also attracted checks from numerous notable individual investors, including Coinbase co-founder Fred Ehrsam, entrepreneur and investor Scott Belsky and former Twitter M-A executive Jessica Verrilli, who recently joined GV as a general partner.

All are betting on TruStoryfounder,Preethi Kasireddy, and iteasy to imagine why, given her trajectory so far. A USC grad who studied industrial and systems engineering, Kasireddy took a job as a banking analyst with Goldman Sachs after graduating, learning how tech company financials work. After less than a year, Kasireddy was searching out a new role as an engineer but a cold call from Andreessen Horowitz led instead to a role on its deals group, where she learned from the firmgeneral partners, as well as developed a fascination with everything blockchain related.

In fact, several years after Andreessen Horowitz wrote an early check to Coinbase, Kasireddy left the firm to work for the digital currency exchange as a self-taught software engineer. There, she says, she architected and implemented the front-end interfaces and APIs required for the integration of Ethereum onto the Coinbase brokerage platform, among other things.

Then she left, again. &I just started to teach myself how to write code that runs on Ethereum. I was contributing to different blockchain projects and just listening, and learning, and observing.& She was also taking note of the growing number of false claims that people were making while raising millions of dollars in the process.

How TruStory will more effectively verify the veracity of these claims isn&t something that Kasireddy is interested in discussing publicly in great detail. (&The space is rampant with people copying other peopleideas.&)

What she can say is that it will use the wisdom of crowds — including scientists and researchers whom she is currently lining up — to evaluate whether a project or person is legitimate. They won&t be doing this out of their own beneficence. When someone successfully validates a claim or else identifies aspects of an offering that doesn&t make sense, she or he will &earn tokens and reputation and influence& for their efforts, Kasireddy explains.

If they&re dishonest, they&ll lose on all three fronts. (The tokens are generated using the protocol itself, she says.)

Eventually, says Kasireddy, the platform will be used to validate far more than white papers. &We&re starting with crypto market and claims being made in white papers and websites and building a network to help investors and researchers who need this information to make the right decisions.& But there are &other ways to use the same incentive design to validate other claims,& she says.

There will also be opportunities for people to buy tokens to have projects vetted, she adds, saying to &think about Facebook or Twitter& where there are plenty of claims of dubious origin that stakeholders might want to see either validated or debunked.

Asked when TruStory will actively start reviewing whatout there already, Kasireddy suggests the outfit isn&t ready for prime time quite yet. TruStory is currently run solely by Kasireddy, who is in the process of bringing aboard a couple of operations people and a few key engineers. But she says that unlike many other founders in todaymarket — including those who&ve raised venture capital — shenot interested in orchestrating an ICO to supercharge her company or her hiring plans.

&We&ll fund ourselves through the development of our tokens, and we expect the tokens eventually to fund the business.

&Itabout getting those token economics to work,& she says. &And then the engine starts up.&

Elon Musk has, as I imagine he often does during meetings or long car rides, come up with an idea for a new thing. Unlike the Hyperloop, which was cool, and various space-related ideas, which we know heat least partly expert about, this one is just plain bad. Itbasically Yelp But For Journalism.

He may as well have said, I found this great can marked &worms& and I&m going to open it, or, I&ve determined a new method for herding cats.

The idea of holding publications and people accountable is great. Unfortunately it is the kind of problem that does not yield to even the best of intentions and smart engineering, because it is quickly complicated by the ethical, procedural and practical questions of crowdsourcing &the truth.&

He agreed with another Twitter user, whose comment is indistinguishable from sarcasm:

My guess is Musk does not often use Yelp, and has never operated a small business like a restaurant or salon.

Especially in todayfiercely divided internet landscape, there is no reliable metric for truth or accountability. Some will say The New York Times is the most trusted newspaper in America — others will call it a debased rag with a liberal agenda. Individual stories will receive the same treatment, with some disputing what they believe are biases and others disputing those same things as totally factual.

And while the truth lies somewhere in-between these extremes, it is unlikely to be the mathematical mean of them. The &wisdom of the crowd,& so often evoked but so seldom demonstrated, cannot depend on an equal number of people being totally wrong in opposite ways, producing a sort of stable system of bias.

The forces at work here — psychological, political, sociological, institutional — are subtle and incalculable.

The origins of this faith, and of the idea that there is somehow a quorum of truth-seekers in this age of deception, are unclear.

Facebookattempts to crowdsource the legitimacy of news stories has had mixed results, and the predictable outcome is, of course, that people simply report as false news with which they disagree. Independent adjudicators are needed, and Facebook has fired and hired them by the hundreds, yet to arrive at some system that produces results worth talking about.

Fact-checking sites perform an invaluable service, but they are labor-intensive, not a self-regulating system like what Musk proposes. Such systems are inevitably and notoriously ruled by chaos, vote brigades, bots, infiltrators, agents provocateur and so on.

Easier said than done — in fact, often said and never done, for years and years and years, by some of the smartest people in the industry. Itnot to say it is impossible, but Muskglib positivity and ignorance or dismissal of a decade and more of efforts on this front are not inspiring. (Nate Silver, for one, is furious.)

Likely as a demonstration of his &faith in the people,& if there are any on bot-ridden Twitter, he has put the idea up for public evaluation.

Currently the vote is about 90 percent yes. Ithard to explain how dumb this is. Yet like most efforts it will be instructive, both to others attempting to tame the zeitgeist, and hopefully to Musk.

GUN is an open-source decentralized database service that allows developers to build fast peer-to-peer applications that will work, even when their users are offline. The company behind the project (which should probably change its name and logo…) today announced that it has raised just over $1.5 million in a seed round led by Draper Associates. Other investors include SalesforceMarc Benioff through Aloha Angels, as well as Boost VC, CRCM and other angel investors.

As GUN founder Mark Nadal told me, itbeen about four years since he started working on this problem, mostly because he saw the database behind his early projects as a single point of failure. When the database goes down, most online services will die with it, after all. So the idea behind GUN is to offer a decentralized database system that offers real-time updates with eventual consistency. You can use GUN to build a peer-to-peer database or opt for a multi-master setup. In this scheme, a cloud-based server simply becomes another peer in the network (though one with more resources and reliability than a userbrowser). GUN users get tools for conflict resolution and other core features out of the box and the data is automatically distributed between peers. When users go offline, data is cached locally and then merged back into this database once they come online.

Nadal built the first prototype of GUN back in 2014, based on a mix of Firebase, MySQL, MongoDB and Cassandra. That was obviously a bit of a hack, but it gained him some traction among developers and enough momentum to carry the idea forward.

Today, the system has been used to build everything from a decentralized version of Reddit (which isn&t currently working) that can handle a few million uniques per month and a similarly decentralized YouTube clone.

Nadal also argues that his system has major speed advantages over some of the incumbents. &From our initial tests we find that for caching, our product is 28 times faster than Redis, MongoDB and others. Now we are looking for partnerships with companies pioneering technology in gaming, IoT, VR and distributed machine learning,& he said.

The Dutch Navy is already using it for some IoT services on its ships and a number of other groups are using it for their AI/ML services. Because its use cases are similar to that of many blockchain projects, Nadal is also looking at how he can target some of those developers to take a closer look at GUN.